LONDON, August 23, 2018 /PRNewswire/ --
Titanium sponge prices have been stable in recent years, averaging under US$10/kg per quarter since 2016 for US imports, providing relief for consumers in a market that saw prices remain above US$15/kg throughout 2008. Stable prices have encouraged consumption of titanium across industrial applications, where it is vulnerable to substitution when prices are perceived as volatile.
Titanium consumption grew by an impressive 9% between 2016 and 2017 and is projected to increase by 6% y-on-y in 2018 to more than 170kt, partly because of lower and stable prices. Growth seen during this period has come not just from industrial uses, but also from the aerospace sector - now the single-largest use for titanium mill products.
The aerospace market has performed strongly in the last decade, having shrugged off the downturn during the global financial crisis, driven primarily by use of titanium in civilian airframes and engines. The commercial airline market is currently enjoying a new era of diversity, with this decade seeing the largest number of new products coming online in the history of the industry. Airliner capacity and traffic are both expected to grow by over 5%py between 2018 and 2028, while Airbus and Boeing, the two leading airframe producers, both report substantial order backlogs.
Threat from 3D printing?
While prospects for both civilian and military aerospace applications look robust over the next decade, the aerospace sector is attempting to reduce its buy-to-fly ratios for material purchasing and use, including for titanium. Buy-to-fly ratios refer to the difference between quantity of material purchased as part of the manufacturing process and the amount contained in the final part.
Near-net shape production techniques such as investment casting and additive manufacturing (AM) could contribute in an overall fall in buy-to-fly ratios to around 4:1 over the forecast period - compared to around 5.5:1 at present.
Should this occur, titanium demand growth would track considerably below airliner growth. In the aerospace industry, the potential impact of AM techniques may be limited in the short term for existing aircraft models because of the long lead time for certifying components.
Yet the process is underway: in May 2018, AM parts manufacturer Norsk Titanium's New York facility was officially added to the qualified producers list (QPL) for Boeing. Norsk is producing structural supports for internal elements near the rear of the cabin for the 787 Dreamliner. Titanium AM parts have also been used by aerospace companies such as GE Aviation, Airbus, Safran and Rolls-Royce.
Medical & industrial markets gather pace
Other applications for titanium look set to expand in the period to 2028. In the consumer and medical sector, use of titanium in orthopaedic components is forecast to grow by around 3.5%py. Titanium is an ideal material for medical components because of its high biocompatibility. Stable sponge prices have incentivised the use of titanium in industrial applications, and in the next decade the prospects for chemical and power generation uses look particularly bright.
Titanium supply remains concentrated in only a handful of countries. Sponge capacity is mostly based in China, Japan and Russia but is also present in the USA, Ukraine and India. A new sponge plant in Saudi Arabia, jointly developed by Advanced Metal Industries Cluster and Japan's Toho Titanium, is scheduled to come online in 2018.
Sponge and scrap are feedstock for titanium melted products (ingot and slab), producers of which are concentrated in the USA (TIMET, Allegheny Technologies, Arconic), Russia (VSMPO), Japan (Kobe Steel, Toho Titanium) and China (Baoti). Ingot and slab products are further processed into titanium mill products, usually by the same companies.
In 2018, global mill product capacity is estimated at over 200ktpy but demand is forecast to exceed this by 2026. Roskill expects that new capacity will be required by the mid-2020s to avoid supply disruptions, though some may be met by AM parts producers.
Roskill's new Titanium Metal: Global Industry, Markets & Outlook 2018 report was published in August.
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