the high cost of titanium

[yaesumofo]

I learned something the other day and I thought I would share it with you.
I went to westec last week A HUGE machine tool and metalwork show, It was great.
So I asked a MAJOR Titanium supplier what was up with the high price of titanium. He said what everybody else says Airbus and Boeing......He also said a whole lot more.
It turns out that one of the things which effects the supply and keeps the price down is the scrap titanium market...You know all the leftover shavings from the machine work...
Well it turns out that instead of all of the scrap Ti working it's way back into the market by recycling what is happening is CHINA is building a lot of steel structure buildings. They are using OUR scrap TI in their steel recipe. they are buying as much of the us crap as they can so this material is not making it's way back into the supply chain. So the TI we buy by the Bar today is most expensive since it is mostly pure virgin non recycled Titanium, this material requires the most energy (most expensive component) to manufacture..this is true of aluminum as well. The more material that is recycled into the supply the lower the price should go since it is much less expensive to re cycle Titanium vs Mining and refining the stuff.
As long as we sell all of our scrap to China Our supply will be more expensive than it should be.
Yaesumofo

 

[Manzerick]

we need to start a "scrap fund" and by back the US scrap!!! :lolsign:


Supply and demand will always win over the chose of suppliers. If not buying scrap one would think the bar's would be purchased and we would have an over prices of scrap.


I read an article some time ago on here where a new method of making Ti was in the works and it would get a lot cheaper..

Can't find it but it was good

 

[tino_ale]

Doesn't make any sense to me.

If Chinese didn't use scrap titanium, what do you think they would use instead? Supplier's titanium.

Unless you have some datas about this, I don't see how you can predict that scrap titanium recycling has more leverage on prices compared to demand volume.

 

[will]

There is a major difference in Aluminum and Ti scrap. A lot of aluminum is used in consumer disposable products, cans to be exact. There may be some used for Ti - but I can't think of any. I would think that any scrap Ti is coming from the aero-space industry, not from consumer based products.

 

[Morelite]

As will said, there is not much scrap in the Ti industry. The only scrap generated is in the machining process and some in the aero-space and marine industry as outdated or damaged parts. Not many products made of Ti are used once and then discarded like there are with Al made products. Yes, China is buying alot of our scrap Ti (along with alot of other metals), but that is only because they are willing to pay more for it than our US industries are willing to pay. Scrap prices are generally set by the cost of virgin / raw material prices and the supply and demand for it and not the other way around.
Around here, I can't find any one even willing to buy my scrap Ti. I have a few pounds of scrap Ti in the form of turnings, chips, damaged or mis-machined parts, and waste pieces too small for usage and none of the metal recyclers around here want to buy it. That may be because they don't get enough of it for it to be worth their trouble.

 

[Anglepoise]

It's a little long , but this explanation, from a Golf Blog ,makes more sense to me....

"The old USSR titanium reserves are drying up. It was at a bargain rate after the USSR fell apart but now large companies are purchasing stockpiles and sitting on it. Prices have gone up quite a bit, in some places sixfold.


While Boeing and Airbus battle to dominate the commercial aircraft market, both agree on one thing: titanium has won out over competing aluminum because its expansion and chemical properties are more compatible with composites. And that's happening even though aerospace-grade metal distributors say the price of titanium has increased fivefold or more in the past 18 months.

"As commercial aircraft get bigger, they use more titanium and composites to add strength and reduce weight," says Robert A. Borowski, Director of Global Procurement at Titanium Metals Corp. in Denver. "Composites can corrode aluminum, but they don't corrode titanium," he tells the recent Steel and Ferroalloys Conference in Pittsburgh sponsored by Platt's Metals Week newsletter.

Boeing delivered 290 jetliners in 2005 and expects to deliver 395 this year. The company finished 2005 with orders for 1,002 aircraft, a record. Airbus has targeted 430 plane deliveries this year, up from 378 in 2005. Each Boeing 737 jetliner, for example, uses 18 metric tons of titanium while the 787 model uses 91 metric tons. The Airbus A320 uses 12 metric tons of titanium and the A380 uses 78 metric tons.

World production of titanium set a record in 2005 at 28,000 metric tons, but consumption will grow steadily through 2011, according to analysts, because of the renewed expansion of commercial aerospace craft and jetliner manufacture. Analyst Mike Gambardella at J.P. Morgan Securities says attendees at the recent Farnborough Air Show in England presented a confidence that "despite the strong demand from aerospace over the past two years, things are likely to only get better from here, with a major pick-up in titanium demand in 2008."

The price of titanium ingot has exploded in the U.S. market to almost $28/lb. It used to cost less than $6/lb on average before the developing titanium shortage. The supply tightness is being caused by rising demand from aircraft production, for armor plate being used by U.S. forces in Iraq and for lower-grade ferrotitanium used in steelmaking. The International Titanium Association predicts that world titanium use in aircraft production alone will increase from 32,000 tons in 2004 to 53,000 tons in 2008.

Analyst Chris Olin at FTN Midwest Securities in Cleveland also believes the global titanium market can remain strong beyond 2009. "We're seeing a very strong level of aviation and aerospace demand against a backdrop of very little investment into increasing supply," he says. "Titanium also is now seeing a huge amount of penetration into the oil and natural gas market." And the use of the metal in medical implants has been growing.

Olin believes the rise in oil and natural gas prices actually has had a positive effect on the titanium market. "In response to rising fuel prices, aerospace companies are increasing their use of lightweight materials such as titanium," he writes. "Further, as energy exploration companies drill into deeper waters, titanium-based platforms get the nod over steel-based ones. Titanium has a longer lifecycle and is lighter, stronger and more resistant to corrosion."

Titanium sponge, the raw material used to produce titanium mill products, is another key price driver, according to Borowski of Timet, noting that world sponge capacity is 108,000 metric tons/year—although it is expected to grow 50% in the next few years. Sponge capacity expansions are being planned by Allegheny Technologies in the U.S., Sumitomo Metals in Japan and VSMPO-Avisma in Russia. But, adding sponge capacity is expensive—it can cost about $400 million to build a 10,000 metric tocommunities/year plant—and lengthy.

Gambardella says Allegheny Technologies is spending close to $275 million to add 40 million pounds of annual titanium sponge capacity and the increase won't become evident on the market until sometime in 2008. Expect golf club prices to rise due to what you have read above, carbon materials are getting more expensive and also Japanese forged steel prices are on the rise."

 

[yaesumofo]

Interesting discussion. My source was a rep from amajor producing companie in the USA. The Chinese are buildings at an astounding rate. This requires a HUGE quantity of ferro titanium. The Ferro-Titanium used in these buildings uses scrap TI from the USA and elsewhere. Since there is less scrap to mix with the sponge the titanium ingot becomes somewhat higher.
This gentleman had no reason to not tell me the truth. All of those aerospace and other industries which manufacture parts on a large scale like aircraft definitely produce huge quantities of scrap TI. There is a very lively market for the stuff. There is no doubt that several things are going on to cause higher TI prices. This is just one element effecting a very large business.
Yaesumofo

 

[Data]

I was begged by a scrap buyer to please save all my Ti chips for him. He was very serious. He told me he uses it in his castings that he has made in . . . you guessed it, China. I told him I only had one barrel and he wanted it anyway.


Cheers
Dave