Significant use of titanium in new aircraft designs, such as the Boeing Dreamliner, raised concerns about potential shortages of the lightweight metal. Titanium components represent 15 per cent of the total weight of the new Boeing aircraft.
But a new report from Roskill Information Services says that an oversupply condition will be in place for two, and possibly three, more years.
The reason? The global recession reduced demand for new aircraft, while new titanium supplies have come on stream. A slow takeoff for the 787 has also kept markets quiet.
Eighteen companies now make titanium sponge, of which nine are in China, compared with just two plants in 2000. In 2010, UTMK, a leading merchant supplier of sponge, started melting ingot on a trial basis and has entered into an agreement with Posco to set up a titanium slab plant in eastern Kazakhstan.
Scheduled expansions will boost capacity to 400,000 metric tons per year by 2015, up from 340,000, 85 percent of which is located in Russia, the USA, Japan and China.
Aerospace is the largest consumer of titanium, with 39 percent of the global market, followed by industrial (48 percent) and consumer (13 percent) uses, according to Roskill.
The shortage of sponge in 2006 triggered a spike in spot market prices from $7/kg to $30. Roskill says prices today are mostly below $10/kg.