Titanium Producers Positioned for Growing Demand

In Europe and North America, aerospace accounts for more than 60% of market.

August 6, 2013
Manufacturing Group
Composites Industry News Materials
The global titanium market recovered rapidly from the sharp downturn in demand in 2009, and by 2011 demand for mill products had reached 165kt, the highest level experienced by the industry. While growth stuttered in 2012, Roskill Information Services Ltd., London, England, is predicting growth of 4% - 5% per year 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 towards 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 principle distinct market for titanium, accounting for a buy-in weight of around 60kt 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 manufacture of aircraft is assured and growing. The Russian company, VSMPO, has emerged as the leading supplier of mill products to the aerospace industry, supplying in excess of 20kt 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.
After falling to 124kt in 2009, global supply of titanium sponge rose by an average of 26.5% per year from 2010 to 2012 to reach 241kt, an estimated 20kt 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.A., 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.
Titanium is recovered as sponge by the Kroll process in which titanium tetrachloride is reduced with magnesium. This is a batch process, which restricts plant capacity and speed of output, but which 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 in advances in melting and machining practice.
The Titanium: Market Outlook to 2018 (6th edition) report contains 356 pages, 142 tables, and 91 figures. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyzes consumption, trade, and prices.