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Titanium shipments on track for another decline in 2013

Keywords: Tags  titanium, titanium mill shipments, U.S. Geological Survey, frank haflich

NEW YORK — U.S. titanium shipments slid 7.3 percent year on year in the first quarter, and a second-half turnaround might be required to prevent the second straight annual decline.

Mill product shipments fell 7.3 percent to 9,210 tonnes (20.3 million pounds) from 9,930 tonnes (21.89 million pounds) in the first three months of last year, the latest U.S. Geological Survey (USGS) data show, although shipments were 3.7 percent higher than 8,880 tonnes in the fourth quarter of 2012.

Unless the pace picks up later this year, shipments could suffer a second straight decline after reaching a record 45,500 tonnes (100.31 million pounds) in 2011. Last year, shipments fell 13 percent to 39,600 tonnes (87.3 million pounds), still the second-highest annual total in history.

"Very little in these figures says that things are improving," an industry source said of the USGS report, pointing out, as did others, that the second quarter showed no improvement from the first quarter.

"I don’t see a whole lot of change out there," a distribution executive said.

Chicago-based Boeing Co., whose commercial aircraft represent the single-largest end market for U.S. titanium shipments, indicated earlier this year that it might lift titanium buys for 2014 above its earlier contracted minimums as it continues to work off inventory. While this turnaround appears likely to most market participants, given the growing order backlogs at Boeing and European rival Airbus SAS, some of them pointed out that they had expected to see signs of a turnaround by now.

In any case, any significant improvement in plane builders’ 2014 demand should become apparent by the fourth quarter of this year at the latest, the market sources said.

One possible bright spot is ingot production, which rose 4.7 percent to 17,900 tonnes in the first quarter from 17,100 tonnes in the fourth quarter of 2012. While this at times is seen as a possible indicator of future shipments, it’s not always considered reliable.

The first-quarter producer price index for titanium mill products compiled by the U.S. Labor Department declined 3.9 percent from the fourth quarter and 14 percent from the first three months of 2012, according to the USGS.

Titanium scrap receipts totaled 10,100 tonnes in the first quarter, down 25.7 percent from 13,600 tonnes in the same period last year and 24.6 percent below the 13,400 tonnes logged in the fourth quarter of 2012.

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