The market for titanium in 2019 has been quite healthy. And it’s only going to get better. That is the general consensus for both producers and distributors of the high-end metal.
“The titanium market is very robust right now,” says Viv Helwig, president of Vested Metals, St. Augustine, Fla., citing strength in the aerospace and medical markets in particular.
“Considering all the things going on with tariffs, to be still pushing along the way it has been is a good thing. All of the industries we sell into have seen pretty solid growth,” says Fabian Chapple, president of Tiger Metals Group, a titanium supplier based in Santa Fe Springs, Calif.
At the September Titanium USA Conference in Mobile, producers had uniformly excellent projections for the future of the material. “With global end use markets expected to remain healthy with high capacity utilization, titanium demand should remain strong,” said Vincent Rocco, VSMPO-Tirus US, Highlands Ranch, Colo.
According to Rocco, ti usage is divided into five major end markets. Aerospace leads the way, occupying 42 percent of global demand, followed by industrial usage at 38 percent. Defense spending claims 11 percent of the market, while medical is 3 percent. Consumers/other consume the remaining 3 percent.
Analysts at Roskill put the aerospace/industrial even higher, saying it accounted for 90 percent of the mill product consumption in 2018.
“In general, titanium has been driven by the aerospace market, with the bigger players Boeing and Airbus. They’re ramping up production and need to make sure they have enough capacity for themselves,” says Graham Clark of MMC Limited, Bloomfield, Conn. The UK-based company has undertaken a substantial growth program in the U.S. since it began trading here in 2006.
All markets, not just aero, will experience growth in the coming years, he says. Rocco forecasts aerospace demand to grow 3.1 percent between 2017-2026, while industrial usage will increase 1.9 percent, medical grow 3.3 percent and consumer/other experiencing the greatest climb at 4.6 percent.
His sunny outlook was shared by other speakers. Bessie Williams, Arconic’s global director of procurement operations, says titanium will enjoy one of the largest market share gains among aerospace raw materials in the coming years. Arconic, Pittsburgh, pegs titanium’s growth at 1.4 percent, trailing only composites at 1.5 percent.
“Titanium is growing in conjunction with composites due to the materials’ compatible properties,” she said.
That view is shared by Steve Patera, vice president of sales for Titanium Processing Center, New Baltimore, Mich. “There was a lot of worry that composites would be a major threat. In reality, composites go with titanium, and titanium with composites has been more commonplace.”
Roskill supports that view, noting there is a trend toward increased intensity of titanium usage in aircraft driven by compatibility with composites. “Recent examples include Boeing’s 787 and Airbus’ A350, which each make extensive use of composites in their fuselages and have correspondingly high titanium loadings.
While the product has seen some substitutions of composites in engine fan blades and casings, Roskill claims, it retains a high level of use in compressor stages, with potential for increased usage of titanium-aluminides in low-pressure turbines.
The gains in commercial aerospace will be mirrored on the defense side, Williams said. In prior generation military aircraft, titanium made up between 7 and 12 percent. In the current generation, titanium represents anywhere from 20 percent of the weight of an F-35 to 39 percent of the F-22.
Moreover, the defense markets around the world are expected to grow. Global growth in defense spending is expected to increase 3.5 percent between 2018 and 2028, Williams said, with gains in all regions of the world. Notably, the U.S. defense budgets are picking up steam from a mid-decade, sequester-driven spending dip, while NATO members in Europe are under pressure to increase their spending as a percentage of GDP.
Titanium is also experiencing growth in the industrial sector, said Albert Bruneau, president of Neotiss at Titanium USA. In the U.S., titanium’s industrial usage is highest in the chemical sector, followed by HVAC, power and oil and gas.
There is considerable growth potential for the material in the power generation and energy segments, Bruneau said, citing geothermal, fuel cells and ocean thermal energy conversion. “Even if it’s a present niche, the contribution of titanium will grow considerably over the coming years,” he said. “OTEC still under development is offering the largest potential for titanium heat exchangers.”
Roskill agrees that power generation is a growing market for titanium, particularly given the overall market is expected to increase through 2029.
Growth in oil and gas is dependent on the development of more titanium alloys, Bruneau said, as existing ones used in aerospace and defense are unsuitable or exceed requirements for many existing applications. And there is some growth in titanium alloys, reports research and consulting firm Fact MR.
The strong demand, naturally, can be a test to supply. Lead times have come down a little bit, though they still extend out significantly in some product categories. Rocco says the demand picture will result in competition for melt slot allocation, longer lead times, priority given to contract customers and stocking programs becoming more desirable. “Titanium acquisition costs could rise,” he said.
Currently, while the price of titanium has been moving up, It hasn’t done so at the same rate as nickel, which can be a boost for the material. “We’ve always felt ti was very competitive with nickel in the first place. Pound for pound, it’s a better value, because you can do more with the same square footage than you can with nickel. You don’t need to use as much titanium as you do nickel to get a project done. So when nickel prices go up, it opens up an opportunity for us in areas where nickel is currently being used,” Patera says.
Helwig says the focus of the mills on serving the aerospace market can make material procurement difficult. “It’s pretty tight right now, specifically flat-rolled. Only a few mills domestically can service the global sheet demand, and a lot of that is consumed by the JSF program.”
Patera is a little more optimistic about availability, noting it’s become easier to find material.
Both agree the trade issues have not played a big role in the titanium market. “So far it’s not been a major factor. It’s been a factor for the Chinese selling titanium into the United States, but we haven’t lost business as a result. At some point, it could catch up to us, but so far, so good,” Patera says.
Helwig agrees, believing tariffs and other measures have had more of an effect on other materials, such as stainless and other specialty metals.
Even if the long term trajectory for the material is pretty sound, there may be limited opportunities for ti to take market share in new markets. Helwig notes that titanium is a rather mature material. “It’s been around for half a century; the breakthrough on usages are few.”
That doesn’t mean nothing changes. One of the key developments all industrial markets will have to contend with in the coming years is the push toward additive manufacturing, and titanium is among the industries most likely to be affected.
“I would say additive is a big focus, especially in this world, with titanium powder usage in medical devices and aerospace industries,” Helwig says. “There’s a lot of talk, a lot of R&D and a lot of investments, with major mills expanding powder capability or building additive capacity.
“We’re still trying to figure out how the distribution channel can take part in it, but I think there will be opportunities in adding value to that supply chain, one’s everybody understands what the moving pieces are,” he says.