European ferro-titanium producers are considering buying premium scrap products and other alternatives, as the severe shortage of titanium turnings and other low-grade titanium scrap has left them unable to secure enough material for the fourth quarter.
One option under consideration is to buy bulkier aerospace scrap products instead of turnings. While similar in grade — at 90pc titanium, 6pc aluminium and 4pc vanadium — they comprise larger parts of aircraft or broken down body parts, rather than turnings and mixed shavings from factory work. It is not an ideal option for ferro-titanium smelters, as it is typically priced at a premium to turnings due to the work involved in breaking it down. It can also cause impurities within the end product.
Argus last assessed prices for titanium turnings at 85-95¢/lb ddp UK on 8 October, having risen sharply from 74-81¢/lb ddp UK at the start of September on the back of supply tightness.
“Putting bulkier products into our furnaces can cause the product to pick up oxygen and nitrogen, because of the amount of time it spends in the furnace breaking down compared to turnings,” a UK smelter said. “Steel mills are always asking for lower impurity levels, so it’s going to cause problems.”
For this option to be economical, ferro-titanium prices would need to rise significantly, above the $5/kg threshold. This could happen in the next few months if market fundamentals remain unchanged and scrap production from aerospace manufacturing stays low. Rotterdam prices for western grade ferro-titanium are currently at $4.10-4.40/kg — up from a year-to-date low of $3.35-3.50/kg in late August — while prices for Russian grade alloy have risen to $3.90-4.10/kg from $3.15-3.40/kg over the same period.
Some steel mills requiring ferro-titanium may have the option to switch to ferro-niobium or ferro-vanadium. Steel producers can use niobium either on its own or combined with some titanium or vanadium to strengthen steel, although not all can.
Another option, which became popular in 2004-05 when ferro-titanium prices rose to above $7/kg, is to produce directly from the titanium ore ilmenite. This method is still used in China, but produces an alloy containing 30-35pc titanium, rather than the 70pc contained in most European and Russian standard grade alloy.
Ferro-titanium 35 is produced from ilmenite, off-grade titanium sponge and steel scrap via aluminothermic reaction, and has a fixed cost that cannot change when prices are low. Some smelters producing ferro-titanium 70 would be unable to follow this method as they use induction furnaces, which cannot use ilmenite.
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