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Titanium surcharge drops at a faster pace

Keywords: Tags  titanium, titanium surcharge, Allvac, Allegheny Technologies, aerospace titanium, titanium bar, titanium billet, titanium flat products Frank Haflich

LOS ANGELES — A key titanium surcharge fell at a fast rate in the fourth quarter after easing slightly for the previous three months.

Allvac Inc., a unit of Pittsburgh-based Allegheny Technologies Inc., lowered its fourth-quarter surcharge on standard aerospace titanium 6aluminum/4vanadium bar and flat products to $4.36 per pound, down 10.3 percent from $4.86 in the third quarter, and applied similar surcharges on titanium 6/4 Eli (extra-low interstitial) bars, flats and billet. The Monroe, N.C.-based company also cut its surcharge on titanium 6/4 billet to $3.97 per pound, down 10.2 percent from $4.42 per pound in the same comparison.

The fourth-quarter falloff contrasts with the third quarter, when the pace of decline on the titanium 6/4 charge slowed to 3.6 percent in the second quarter, raising speculation that prices were approaching stabilization. In the first and second quarters, the surcharge fell by 15.4 percent and 10.6 percent, respectively (, July 1).

"We think the mills are still hungry for business," one market source said.

Allvac doesn’t disclose the specific elements of its surcharge or their portions. However they are assumed to include scrap, one of the most significant components; sponge; master alloys; and energy.

Mills are reportedly paying in the range of $1.85 to $1.90 per pound for unprepared bulk weldable scrap from generators, slightly higher than a month or two ago but still down significantly from the high point in the current cycle, estimated at about $5.50 per pound in mid-2011.

Despite what some market sources concede is a disappointing end of 2013, reflected in part by the raw surcharge decline, they nevertheless continue to insist that pricing has pretty much bottomed out, with no great impetus to move sharply up or down.

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