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| Overall, strong growth in consumption of titanium metal is expected over the next five years, with significant investment in new productive capacity based on the Kroll process. Only relatively small quantities of titanium powder are expected to be produced. The large projected increase in production, particularly in China, is expected to drive titanium prices back to levels nearer their long term historical average. | ||
| Titanium consumption | ||
| The price of titanium sponge is projected to decline over the medium term. Prices are expected to fall in real terms (2006 dollars) to around US$10 000 a tonne by 2009 and then to rise again in 2011 to around US$15 000 a tonne. The fall over the short term reflects an increase in global production, particularly in China. The rise toward the end of the outlook period reflects increased capacity utilisation at the melting and milling stages of production, which will flow on to strong demand for titanium sponge and an increase in prices. Titanium consumption is projected to grow strongly over the medium term (table 8), driven by a five year backlog of aircraft orders and continued high levels of economic growth in the emerging economies of China and India. Industrial applications are expected to continue to have the highest rate of growth over the outlook period — accounting for around 60 per cent of overall growth in consumption of titanium mill products. Use of titanium mill products in industrial applications is expected to increase strongly in China and India. This is attributed to expansions in power generation and chemical processing that are expected to occur as these two countries continue to experience high rates of economic growth. Strong growth is also expected in aerospace applications as Boeing and Airbus attempt to clear a five year backlog of orders. Increased use of titanium in new aircraft designs adds further potential for growth above the expected high construction rates. Wide body and double aisled aircraft are expected to consume proportionately more titanium than narrow bodied and single aisled aircraft. An industry trend toward larger aircraft, particularly in the airfreight sector, is expected to further increase the use of titanium in aerospace applications. On a regional basis, the strongest growth in consumption of titanium mill products is expected to occur in China (table 9), where consumption is projected to more than double from 12 000 tonnes in 2005 to 25 000 tonnes in 2011 — an average annual growth rate of 12 per cent. By 2011, China is expected to have increased its share of global titanium mill product consumption from 15 per cent to 20 per cent (figure e). Chinese Taipei, the republic of Korea and other countries, dominated by India, are also expected to increase their shares of mill product consumption, while the consumption shares of north America, the European Union, Japan and the Russian Federation are all expected to decrease.  |
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| Titanium production | ||
| The most significant development in production over the medium term is the projected increase in China’s titanium sponge production from 13 000 tonnes in 2006 to 61 000 tonnes in 2011 — an average annual growth rate of 35 per cent. By 2011, China is expected to have increased its share of global titanium sponge production from 11 per cent to 27 per cent (figure f). However, it should be noted that some of the planned expansions in China may be delayed because of environmental concerns. Of the current producers, only Ust Kamenogorsk in Kazakhstan, Zaporozhye in the Ukraine and specialty producer Alta Group in the United States have not announced plans to expand their productive capacities by 2011. US production of titanium sponge is expected to grow on average by around 18 per cent a year from 11 000 tonnes in 2006 to 25 000 tonnes in 2011. This is a result of around 15 000 tonnes of new capacity being brought on line in the next three years. Strong growth in production is also expected in China (averaging around 35 per cent a year) as production increases from 13 300 tonnes in 2006 to 61 000 tonnes in 2011 (table 10). Toward the end of the outlook period, capacity utilisation at the melting and milling production stages is projected to increase as consumption is projected to increase faster than known capacity expansions (Buch 2006). However, it is expected that there will be enough available capacity to satisfy demand.  There are no reliable data available on the production of titanium powder. However, production is estimated to be no more than 10 000 tonnes and is probably more likely to be around 8400 tonnes (Roskill 2007). Given current production techniques, it is not expected that production of titanium powder will increase significantly. This is because of the high cost of producing commercially pure titanium powder and the powder’s current limited use. It should be noted that current commercially available powders are produced by secondary processing of titanium derived from the Kroll process, with associated additional costs — for example, using a hydride–dehydride process or by melting the metal and fragmenting the liquid into fine droplets and quenching. New productive capacity to be brought on line between 2006 and 2011 is expected to use the Kroll process to produce titanium sponge. The longer term outlook for titanium will be influenced by the extent to which new production technologies are adopted and by how much they can reduce production costs. A reduction in production costs would place downward pressure on the price of titanium mill products and increase demand for titanium. Part of this increased demand may come from entirely new applications. Three long term growth scenarios for the world titanium market are briefly considered in the next chapter. |
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2011 |
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consumption |
share of total |
growth rate, 2005-2011 b |
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kt |
% |
% |
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| aerospace | 45 |
36 |
6.2 |
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| industrial | 65 |
53 |
8 |
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| consumer | |||||
| and other | 13 |
11 |
3.8 |
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| total | 124 |
100 |
6.8 |
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| a data for 2005 are provided in table 3 .b average annual growth rate. Source: Roskill (2007). |
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2011 |
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consumption |
share of total |
growth rate, 2005-2011 b |
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kt |
% |
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| north | |||||
| america | 37.4 |
30.3 |
6.7 |
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| european | |||||
| union | 25.4 |
20.5 |
4.1 |
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| china | 24.5 |
19.8 |
12.3 |
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| japan | 11.5 |
9.3 |
2.2 |
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| russian | |||||
| federation | 6 |
4.9 |
3.2 |
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| chinese taipei | |||||
| and south | |||||
| korea | 13.7 |
11.1 |
8.9 |
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| other | 5.1 |
4.1 |
13.3 |
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| total | 123.6 |
100 |
6.8 |
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| a Data for 2005 are provided in table 4. b average annual growth rate. Source: Roskill (2007) |
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2011 |
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consumption |
share of total |
growth rate, 2005-2011 b |
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kt |
% |
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| japan | 63 |
28.2 |
11.2 |
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| russian | |||||
| federation | 42 |
18.8 |
7 |
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| kazakhstan | 23 |
10.3 |
0 |
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| united states | 25 |
11.1 |
17.6 |
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| china | 61 |
27.1 |
35.4 |
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| ukraine | 10 |
4.5 |
0 |
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| total | 223 |
100 |
12.4 |
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| a data for 2006 are available in table 5. b average annual growth rate. Sources: Roskill (2007), TZMI (2007), ABARE projections. |
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