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Titanium surcharge falls at slower pace

Keywords: Tags  Allvac, titanium, surcharge, ATI, Allegheny Technologies, Frank Haflich

NEW YORK — A key titanium surcharge is continuing to fall in the third quarter but at a much slower pace than earlier in 2013.

Allvac Inc.’s surcharge for aerospace standard alloy 6-aluminum/4-vanadium bar and flat products is $4.86 per pound in July, down 3.6 percent from $5.04 in the second quarter, while its surcharge for titanium 6/4 billet is down 3.7 percent to $4.42 per pound from $4.59 in the same comparison. Surcharges for titanium 6/4 Eli (extra-low interstitial) bar, flats and billet are the same as for standard products.

The third-quarter decline follows much larger falls in both the first and second quarters, when Allvac’s benchmark 6/4 surcharge was off 15.4 percent and 10.6 percent, respectively.

"There were some big drops earlier in the past six months," one buyer source said. "Maybe things have stabilized. Maybe we’ve bottomed out here."

Allvac, a Monroe, N.C.-based unit of Allegheny Technologies Inc., doesn’t disclose the specific elements of its surcharges or their portions, but they are assumed to include scrap—one of the most significant components—sponge, master alloys and energy.

The comparatively modest third-quarter drop in surcharges would appear to support market sources who said at the beginning of the second quarter that scrap prices had appeared to stabilize at low levels (, April 5). However, neither does it contradict the view of some others that there’s little solid evidence yet that scrap is poised to move up.

While the surcharges on most other popular alloys were down at least slightly, some actually rose. The third-quarter surcharge for titanium 6-aluminum/2-tin/4-zirconium/2-molybdenum, widely used in aircraft engines, edged up slightly to $6.07 per pound on bar and flats from $6.03 in the second quarter and to $5.53 per pound on billets from $5.49 in the same comparison.

Titanium 3-aluminum/2.5-vanadium, primarily used for tubing, was off 1.7 percent to $5.07 per pound for bars and flats and $4.62 per pound for billets.

One surcharge that defied the trend and declined at a faster pace in the third quarter was commercially pure Grade 2 titanium, used mainly for nonaerospace industrial applications. The charge on CP Grade 2, which was down 2 percent in the second quarter, fell 6.4 percent for the third quarter to $4.37 per pound for bar and flat products and $3.98 per pound for billet.

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