Propelled by Aerospace Sector, Titanium Scrap Market Achieves a Healthy Balance
The scrap/revert market for the North American titanium industry has achieved a healthy business balance, a trend that should be sustained for the remainder of this year. Aerospace continues to be the bellwether sector for titanium, helping to overcome more tepid business conditions found in other key markets such as industrial, consumer and medical.
According to information posted by the U.S. Geological Survey (USGS), receipts of titanium scrap for the first three quarters of 2014 totaled 36,700 metric tons (MT). Full-year scrap receipts in 2013 registered 52,600 MT, compared with 48,800 MT in 2012. Titanium scrap receipts are divided into two categories: “home” scrap produced in-house; and purchased scrap bought on the open market from recycling brokers.
Titanium industry sources estimate that the size of the global titanium scrap market is 80,000 MTs for aerospace titanium scrap, and 80,000 MTs for mixed ferro-titanium scrap, which is used in steel production.
Edward J. Newman, senior vice president of United Alloys and Metals Inc., Columbus, OH, an international processor of titanium, stainless steel and superalloy scrap, said that, beginning in early 2014, surging aerospace manufacturing has boosted the titanium market. In recent business conferences, Boeing has forecasted long-term demand for 36,770 new airplanes, valued at $5.2 trillion through 2033. Airbus, with an outlook that runs through 2032, projects demand for over 29,000 new passenger aircraft and freighters, worth $4.4 trillion.
Newman, who also serves on the board of directors for the International Titanium Association, Denver, CO, said ever since the great economic meltdown of 2008/2009 there has been “oversupply of metal at every stage of the titanium market. It took a long time to burn off that inventory. Now inventories are under control and the supply chain has leveled out. Today everyone is happy with business conditions in the titanium scrap market, in terms of volumes and demand.” Sources indicated these positive business trends for titanium scrap should continue through the balance of this year and into 2016.
Other titanium scrap processors and distributors concurred with Newman’s observations. Vasily Semeniuta, president of Grandis Titanium Co., Rancho Santa Margarita, CA, described the titanium scrap market as “in balance. (Scrap) Supply is a bit more than demand, but there is plenty of work and plenty of scrap available,” Semeniuta said. Another West Coast scrap processor, who requested anonymity, said that, thanks to the aerospace sector, the titanium scrap market remains healthy, especially when compared to the current fortunes of the steel and copper scrap markets. He said those markets have sagged in recent months due to oversupply, a strong dollar, and sluggish business conditions in Europe and Asia.
While aerospace continues to be the engine driving the titanium scrap market, other key sectors, such as industrial, medical and consumer goods have lagged. Newman explained the industrial market typically is spotty when it comes to consistently generating demand for titanium, and in turn, scrap volumes. “It goes up and down, big project to big project,” he said, citing chemical processing, heat exchanger and desalination programs as prime examples. Medical and consumer, by comparison, are small, specialty markets for titanium.
Closed-Loop Recycling Systems: There are two factors that have altered the dynamics of the titanium scrap market, according to Newman and other sources. First is the ongoing focus for developing closed-loop revert programs in the aerospace business. It’s a loop that stretches from vendors to original equipment manufacturers and includes melting, forging, machining, finishing and assembly facilities.
Boeing Commercial Airplanes has been the primary driver in promoting the closed-loop scrap recycling concept for titanium. During the last three years Boeing executives have emphasized closed-loop recycling as a critical element in the titanium supply chain. When it comes to sourcing titanium, Boeing is looking to achieve a “system balance,” which takes into account demand, inventory levels, and revert volume. It’s a recycling strategy designed to keep aerospace-quality scrap within the aerospace supply chain. In 2013 Boeing’s closed-loop efforts recovered 8 million pounds of titanium and 13 million pounds of aluminum. For 2014, those levels were expected to reach 10 million pounds for titanium and 19 million pounds for aluminum.
Second, upstream consolidation in the titanium supply chain is affecting the flow of scrap. Major titanium producers, in recent years, have purchased titanium casting, forging and assembly operations. Newman said the thrust is for titanium producers to capture the manufacturing resources offered by these acquisitions, thereby expanding their reach in the supply chain. The scrap generated by these acquisitions translates as an important side benefit.
Last November Pittsburgh-based aluminum giant Alcoa finalized its purchase of Firth Rixson, a British producer of seamless titanium and superalloy rolled rings for jet engines. News reports at the time stated Firth Rixson strengthens Alcoa’s aerospace portfolio and “accelerates Alcoa’s transformation to a multi-material enterprise. The acquisition increases its offerings made of nickel-based superalloys, titanium, stainless steel and advanced aluminum alloys.”
Precision Castparts Corp. Portland, OR, has moved aggressively on the acquisition trail, and in early 2013 completed its deal to buy titanium producer Titanium Metals Corp. (TIMET). In 2011 ATI purchased the forging and investment casting assets of Ladish Co. Inc. RTI, in 2012, acquired Remmele Engineering Inc., an integrated producer of titanium components.
LIBS Technology: Given the growing importance of scrap in the titanium supply chain, especially as dictated by the aerospace sector, several companies are developing technologies to further enhance the value of the material. One group, VDM Metals GmbH, Werdohl, Germany, will present a technical paper (“Electron Beam Cold-Hearth Remelting of Titanium and Scrap Control by LIBS Technology”) at the TITANIUM EUROPE Conference and Exhibition, which will be held May 11-13 in Birmingham, England, UK.
Electron beam cold-hearth melting is an established technology that provides superior refining for titanium. VDM Metals has been researching new recycling strategies in collaboration with Leibniz University of Hanover (Germany), and other industrial partners. In its paper, VDM Metals explains that eliminating impurities and inclusions (porosity) from titanium alloy scrap is essential if the scrap is to be used in critical aerospace rotating parts. Titanium is a difficult material to mill (compared with steel or aluminum), which results in high tool wear. Tool material particles represent a source of contamination for titanium scrap. Contamination also can come from other scrap metals, welding electrodes and coolant/lubricant materials.
“The melting of Ti-6Al-4V (a workhorse aerospace alloy) in an electron beam furnace is a challenge,” the paper states. “It has been shown that it’s absolutely necessary to obtain a stable process with a constant melting rate. The scrap should always be free from contamination.”
To meet stringent aerospace specifications, VDM Metals is developing a system designed to provide 100-percent scrap inspection, using a technology known as LIBS (laser-induced breakdown spectroscopy). The project encompasses continuous, inline scrap control with integrated analysis to identify low- and high-density inclusions.
VDM Metals currently is operating a pilot plant to demonstrate the system, with an LIBS unit built by SECOPTA GmbH, Berlin. The technology, if proven effective, would garner significant interest in the North American titanium market. It’s estimated there are at least 14 cold-hearth furnaces operating in the United States. Six new furnaces have come on line during the last seven years, including RTI’s facility in Canton, OH, and Timet’s installation in Morgantown, PA.