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MARKETS Titanium Producers Positioned for Growing Demand The global titanium market recovered rapidly from the sharp downturn in demand in 2009 and by 2011 demand for mill products had reached 165,000 metric tons (mt), the highest level experienced by the industry. While growth stuttered in 2012, Roskill is predicting growth of 4%-5% through to 2018. In Europe and North America, aerospace applications regularly account for more than 60% of demand. Production of titanium sponge and mill products in these regions is also largely orientated toward the aerospace market. The rapid growth in production of sponge and mill products in China serves the growing domestic demand in industrial applications, which accounted for more than 80% of consumption in 2012. Despite the volatility of the market and the development of other applications, aerospace remains the principal distinct market for titanium, accounting for a buy-in weight of around 60,000 mt of mill products in 2012. The new generation of large passenger aircraft, the A380 and A350 from Airbus and the B787 from Boeing, use greater volumes of carbon-fiber reinforced polymers (CFRP) in the airframe. CFRPs are compatible with titanium, but not with aluminum, which ensures that titanium's position as a key material in the manu- facture of aircraft is assured and growing. Russian company VSMPO has emerged as the leading supplier of mill products to the aerospace industry, supplying in excess of 20,000 mt in 2012. The use of titanium in industrial applications is more price sensitive, as specifications are not as rigorous as they are in aerospace and there is competition from other high performance alloys. This price sensitivity is more apparent in Europe and North America than in China, which now accounts for half of all demand in industrial applications. It appears that titanium is selected in preference to (less costly) materials for use in Chinese industrial plants. Growing Output of Titanium Sponge After falling to 124,000 mt in 2009, global supply of titanium sponge rose by an average of 26.5% per year from 2010 to 2012 to reach 241,000 mt; an estimated 20,000 mt surplus in demand. However, much of this surplus was in China and was for industrial grade material. Aerospace grade sponge is mainly produced in Japan, Russia, the U.S. and Kazakhstan, and Roskill considers that current and forecast supply is more than adequate to meet demand as there is some unused capacity overhanging the market. U.S. imports account for more than half the world trade in titanium sponge and U.S. melting companies continue to rely heavily on imports from Japan and Kazakhstan, although shipments from the latter country are falling as an increasing proportion of output is processed locally. The Search to Reduce Production Costs Titanium is recovered as sponge by the Kroll process in which titanium tetrachloride is reduced with magnesium. This is a batch process that restricts plant capacity and speed of output, but allows a rapid response to global demand. Research is ongoing into continuous processes for direct reduction of the oxide (or other intermediate) in an attempt to cut production costs. In 2013, just one plant using the direct reduction process is operating, accounting for less than 1% of supply. More significant cost reductions have been achieved through advances in melting and machining practice. This article is based on data reported in Titanium: Market Outlook to 2018 (6th edition), which is available at an introductory price of £4410 / US$7110 / €5580 from Roskill Information Services in London. www.roskill.com/titanium (August 1, 2013) Precious Metals ($/oz) Gold $1,308.90 Silver Platinum $19.63 $1,440.00 Base Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Aluminum $1,776.50 Molybdenum $20,600 Euro (€) 1.3254 Copper $6,999.00 Cobalt $26,320 U.K. (£) 1.5170 Lead $2,090.00 Canada ($) 0.9706 Australia ($) 0.8956 South Africa (Rand) 0.1011 China (¥) 0.1620 Palladium $732.00 Nickel $13,765.00 Rhodium $975.00 Tin $20,555.00 $80.00 Zinc $1,822.50 Ruthenium Minor Metals ($/mt) Iron Ore ($/dmt) Fe CFR China $129.75 Gold and silver prices provided by KITCO Bullion dealers (http://www.kitco.com). Platinum group metals prices provided by Johnson Matthey (http://www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (http://www.lme.co.uk). Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by the GoCurrency.com. 112 E&MJ; • AUGUST 2013 www.e-mj.com