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Ferro-titanium prices remained weak in Europe on Wednesday July 23, but could change direction in the coming weeks, market participants suggested.
The likelihood of falling ferro-titanium availability, coupled with renewed demand, is expected to push prices up into August and beyond, sources said.
Driving the potential for a fall in ferro-titanium availability is the strength of titanium scrap prices, which have been resolutely high even as alloy prices fell over the course of the summer.
Raw material availability is also becoming thinner, leading ferro-titanium producers to consider cutting output because they are unable to make a margin.
As ferro-titanium becomes scarcer and demand returns into the autumn, prices are expected to continue to rise, but this will be of little comfort to producers, who say they are finding it more and more difficult to get hold of scrap.
A large proportion of scrap is sourced from the USA, one producer said, but the amount of material leaving the country has fallen in recent months.
“More [titanium scrap] is being recycled. There is scrap being generated, but it’s being used domestically,” he said.
“[The market there] has stayed fairly buoyant – they’re busy every day and they have [a supply] of scrap.”
On top of this, ferro-titanium production levels increased in the UK earlier in the year, leading to greater depletion of scrap supplies, which have not been replenished, the producer said.
As a result, some companies are considering cutting output by as much as half.
“The cost to operate is about $6 [per kg], but scrap is being offered to us at a price that’s too high,” the producer said.
“Something else that is happening is that customers want tighter specs, and there’s no scrap to support it,” he added.
Metal Bulletin’s quotation remained at $5.80-6 per kg, a level at which producers say they are unable to make a profit, as the cost of production renders it impossible, especially as consumers request larger tonnages.
Some sources have suggested the renewed tensions between Russia and Ukraine could have an effect on prices, but it is not yet clear whether this is the case.
Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb