Table of Contents
Preface iii
Figures ix
Tables xi
Summary xiii
Acknowledgments xxiii
Abbreviations xxv
Chapter One Introduction 1
Background 1
Study Objective 4
Approach 5
Outline of the Monograph 6
Chapter Two Titanium Processing 7
Titanium and Its Properties 7
Titanium Metal Products 8
Ores and Concentrates 8
Sponge 8
Ingot 9
Mill Products 9
Production Processes 9
Extracting Titanium Metal from Ore 10
Producing Ingot from Sponge 10
Primary Fabrication: Processing Ingot to Mill Products 13
Secondary Fabrication: Fabrication Parts from Mill Products 14
Scrap 14
Ferrotitanium 15
Production Cost Structure 16
Refining Cost 17
Fabrication Cost 17
Buy-to-Fly Ratio 18
Cost-Saving Technical Changes 18
Summary 19
Chapter Three The Titanium Industrial Base and Other Market Characteristics 21
Geographic Distribution 21
Major Producers 22
Major Buyers 24
Substitutes and Complements 28
Market Price 29
Oligopolistic Price 29
Market Size and Market Risks 29
Spot Market Versus Long-Term Contracts 30
Import Tariffs 31
Summary 32
Chapter Four Supply-Side Drivers of Titanium Price Fluctuations 35
Availability and Price Trends of Raw Material 35
Sponge and Scrap Shortage 36
Depletion of U.S. Titanium Sponge Stockpile 38
Responsiveness of Production Capacity to Demand 39
Excess Production Capacity of Titanium Sponge Until 2004 40
Titanium Sponge Production Capacity Expansion After 2004 41
Other Supply-Side Factors 42
Entry and Exit 42
U.S. Titanium Metal Production Capacity Trends 44
Berry Amendment 45
China's Impact on Titanium Prices 48
Summary 49
Chapter Five Demand-Side Drivers of Titanium PriceFluctuations 51
Three Primary Demand Drivers of the Commercial Aircraft Manufacturing Industry 52
Commercial Aircraft Orders Skyrocketed 52
Titanium Content per Aircraft Increased 53
Increased Demand from Military Aircraft Manufacturers 53
Increased Demand from the Industrial Sector 55
Increased Spot Market Transactions 57
Interaction of Demand- and Supply-Side Drivers to Bring Out the Recent Turmoil in the Titanium Market 59
Relationship Between Titanium Price Trends and Demand Shocks from the Aircraft Manufacturing Industry 59
Titanium Demand from the Commercial Aircraft Industry and Titanium Price Trends 60
Titanium Mill Product Price Elasticity Before 2004 64
Price Elasticity of Titanium Demand Since 2004 68
Summary 69
Chapter Six Market Prospects and Emerging Technologies 73
Market Prospects 73
Prospects of the World Titanium Sponge Supply 73
The Impact of China on the Titanium Supply 76
Future Demand for Titanium 77
Summary: Future Titanium Market Balance 81
Developments in Titanium Production Technology 82
Emerging Production Techniques 83
Improved Titanium Extraction and Refinement 84
Titanium Powder Metallurgy 87
Single-Melt Processing 88
Solid Freeform Fabrication 90
Improvements in Machining 91
Cost-Saving Potential of Emerging Technologies 92
Summary: Developments in Titanium Production Technology 93
Chapter Seven Conclusions and Policy Implications 95
What Triggered the Recent Titanium Price Surge? 95
China's Impact on Titanium Prices 97
Market Prospects and Emerging Technologies 97
The Titanium Market in the Near Future 97
Titanium Production Cost Drivers 98
Emerging Technologies 99
Policy Implications 101
Long-Term Contracts Are Needed to Mitigate Market Volatility 102
Monitoring Market Trends to Improve Forecasting Power 103
Reducing BTF Ratio and Optimizing Scrap Recycling 105
Searching for New Technological Opportunities 106
Appendixes
A Aircraft Included in the Titanium Demand Calculation and Data Sources 109
B Questionnaire to Industry Experts 111
C Supply- and Demand-Side Conditions Resulting in the Recent Titanium Market Turmoil 119
Bibliography 123
