Boeing Co. is still buying titanium at its contracted minimum
rate from Allegheny Technologies Inc. (ATI), but the head of
ATI believes the aerospace giant is drawing closer to
increasing its requirements.
"I think that with
each passing month and with each passing quarter, as they
continue to ramp up the (production) rate they continue to eat
into" their titanium inventory, ATI chairman, president and
chief executive officer Richard J. Harshman said about Boeing,
according to a transcript of ATIs second-quarter earnings
that Chicago-based Boeing is "not at this point in time above
the minimum take-or-pay" level of buying titanium, but said ATI
is closer to moving above contracted minimums with Boeing "than
weve ever been," although he gave no forecast of when
thats likely to occur.
inventory appears to have remained high longer than most
outsiders had forecast.
primarily through its Monroe, N.C.-based ATI Allvac Inc. unit,
is one of three suppliers of mill product to Boeing Commercial
Airplanes under the program of long-term purchase agreements
initiated by the Boeing subsidiary in the late 1990s. The
others are Precision Castparts Corp.s Titanium Metals
Corp. and Russias VSMPO-Avisma Corp.
said ATI is "just at the very beginning" of tapping into new
aircraft engine markets for its titanium investment casings,
including the Leading Edge Aviation Propulsion (LEAP)
high-bypass turbofan produced by CFM International, a joint
venture of General Electric Co. and Snecma SA of France, as
well as other engines.
He said the programs
ATI has won are in first-article production and the company
will begin to see some of that early growth in 2014, with
others beginning to "kick in" in 2015 and 2016.
prominent involvement in investment castings is its Cudahy,
Wis.-based Ladish Co. operation, which it purchased in 2011 for
that ATI has about $2.7 million in business on each Boeing 787,
including airframe and jet engine parts produced from titanium
and other alloys. This includes forgings, castings and net
shapes and "certain conservative assumptions" for mill
products, he said.
For the 787s
main rival, the A350built by Europes Airbus
SASHarshman said ATI has "significant content" on the
Rolls-Royce Trent XWB jet engine, while its also "working
on many opportunities to improve our position with Airbus on
its supply chain."