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Low-price titanium scrap slows sponge imports

Keywords: Tags  titanium sponge, sponge imports, titanium scrap, RTI International Metals, ATI, Allegheny Technologies, Frank Haflich

LOS ANGELES — Titanium sponge imports have plummeted this year, underscoring the rising role of scrap in the U.S. titanium melt.

U.S. titanium sponge imports fell to 3,390 tonnes in the second quarter, down 39.5 percent from 5,600 tonnes in the first three months of this year and 62.6 percent below 9,060 tonnes in the second quarter of 2012, according to the latest data from the U.S. Geological Survey.

The decline in sponge imports was attributed by most industry sources to a drop in scrap prices, which has made scrap an increasingly attractive alternative. Estimated dealer buying prices for unprepared bulk weldables have declined steadily to $2 per pound or less recently from about $5.50 in mid-2011. But there’s some speculation the decline may be over.

"We’re two and a half years into this (decline) but I think we’ve finally bottomed out," one scrap industry source said.

Japan was the largest supplier of sponge to the United States in the second quarter at 2,070 tonnes, or 61.1 percent of U.S. imports compared with 56.1 percent of U.S. imports for all of 2012, followed by China (738 tonnes) and Ukraine (348 tonnes).

In fourth place was Kazakhstan, which supplied an estimated 120 tonnes in the second quarter. Kazakhstan supplied 8,150 tonnes to the United States last year, behind only Japan, but the country increasingly has directed its sponge output into its own recently built melting capacity.

Growing use of scrap instead of sponge has been evident in U.S. titanium producers’ financial results. Pittsburgh-based RTI International Metals Inc. said last week that low scrap costs contributed to a big jump in third-quarter net income (, Nov. 7).

In October, Pittsburgh-based Allegheny Technologies Inc. pointed out that it was running its Rowley, Utah, plant at a higher level than might be economically justified in a low-priced scrap environment in order for the facility to qualify for premium-quality sponge used for rotating engine parts (, Oct. 25).

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