Allegheny Technologies Inc.s (ATIs) permanent
closure of its Albany, Ore., titanium sponge plant is seen
having little impact on the market, industry sources said, as
ATIs newer Utah plant sponge facility continues to pursue
ATI no longer sees "a
reasonable likelihood of operating the Albany sponge facility
in the future," Richard J. Harshman, chairman, president and
chief executive officer, said during a recent quarterly
earnings conference call (
amm.com, Jan. 22).
wouldnt have been a factor" in the sponge market if ATI
kept it on the books, an executive at another company said,
citing existing supply in both the United States and Japan, the
largest import source. He maintained that the industry was
looking for ATI to permanently "take the hit" on the Albany
plant, which isnt seen as competitive in a global market
with a number of efficient producers.
The Albany plant,
idled in 2009 due to slumping market conditions, has an annual
capacity of 22 million pounds, while the capacity of ATIs
Rowley, Utah, plant, which started up in late 2009, is 24
million pounds per year.
Harshman pointed out
that the Albany plant used the older acid-leach sponge process
vs. the later-generation vacuum distillation employed at
Rowley, which is "on track" to successfully complete the
qualification program for premium-quality sponge in 2015.
Others noted that low scrap prices over the past two years have
made sponge less economical for certain aerospace alloys.
"As we look to the
future in our strategic planning, its clear we see no
reason for operating the Albany sponge facility," an ATI
spokesman told AMM.
qualification involves not only sponge produced at Rowley but
also downstream operations at other ATI operations, most
prominently its Monroe, N.C.-based ATI Allvac Inc. unit, one of
the larger U.S. producers of rotor-grade titanium products for
the engine market.
The process dictates
that ATI produce a certain volume of titanium sponge at Rowley
"specifically for the qualification program," and requires this
sponge to go through "all of our melt
technologies"electron beam, vacuum-arc remelt and
plasma-arc meltsubsequently being made into a
"defect-free" round bar, Harshman pointed out.
Rowley is currently
running at 50 to 60 percent of capacity, the ATI spokesman
said, but didnt disclose how much sponge is being
directed to premium-quality qualification and what portion to
the industrial and standard aerospace markets for which it
ATIs decision to
shut the Albany plant leaves just two remaining domestic
producers of titanium sponge metal: its Rowley plant, along
with the Henderson, Nev., operation of Titanium Metals Corp., a
subsidiary of Precision Castparts Corp., Portland, Ore.
titanium shipments in the fourth quarter declined 10.1 percent
to 8 million pounds from 8.9 million pounds in the year-ago
period. Shipments for the year were essentially flat at 37.3
million pounds vs. 37.6 million pounds in 2012. This includes
both aerospace long products shipped by Allvac and flat-rolled
products, along with the output of ATIs Uniti LLC joint
venture with Russias VSMPO-Avisma Corp. for commercially
pure titanium for nonaerospace markets.
continues to pay a price for its premium-quality qualification
effort, with its fourth-quarter results hurt by its "strategic
decision" to use Rowley sponge instead of lower-cost titanium
scrap for titanium mill products (
amm.com, Oct. 25).
Editor's note: This story was updated Feb. 3, 2014. Due to
an editing error, the story implied that ATI anticipated no
market impact as a result of the permanent closure of its
Albany, Ore., sponge facility rather than industry