Domestic titanium scrap demand and, in turn, prices are expected to increase in the second half of 2025, supported by a recovery in aircraft build rates and expansions in titanium melters' capacity that have boosted sentiment across the supply chain following a disappointing year.
Industry expectations of greater scrap requirements in 2024 — predicated on aerospace manufacturers increasing their build rates — failed to materialize after production missteps and supply chain bottlenecks forced Boeing to curb output of its main aircraft programs and Airbus to delay its ramp targets.
US prices for aerospace-grade titanium scrap have tumbled this year compared with 2023 averages, with 6-4 turnings off by 25pc and 6-4 bulk weldable down by 13pc through mid-December from the same period the prior year.Titanium melters' efforts to control input costs have had a trickle-down effect across the scrap supply chain, compelling processors and dealers to reduce their bids also to protect margins.
Scrap suppliers foresee stronger consumption signals for 2025, pointing to the return of Boeing's 737 MAX production following a seven-week strike and the gradual decline of scrap inventories that have remained elevated relative to demand.
Dealer and processors also are looking forward to the return of normalized build rates for Boeing's 787 Dreamliner, its main wide-body model that contains about 15pc titanium compared with around 6pc for the 737. Production of the 787 has been hampered this year because of parts shortages, which the airframer expects to stamp out before year end.
Still, those outlooks may be upended depending on whether US president-elect Donald Trump follows through with his plans to impose sweeping tariffs on all imports into the US, and sources told Argus that any recovery likely will not take place until the summer at the earliest, cautioning that it would take months before the scrap industry would benefit from the comeback in aircraft manufacturing.
Feeding new furnaces
Market participants are banking on additional ingot production capacity that is scheduled to come on line in 2025 to fuel demand for aerospace-grade scrap, saying titanium melters will want to keep their new furnaces running hot.
ATI expects to finish product qualifications related to its expansion at its Richland, Washington, operations next year, which should boost its melting capacity by 35pc over 2022 levels.
Titanium Metals (TIMET) this summer plans to commission its new plant in Ravenswood, West Virginia, which is expected to turn out 33mn lbs of ingot annually in the project's first phase. Still, lengthy product qualifications may push out any benefit for the scrap supply chain to 2026.
Perryman currently is ramping up after expanding its facility in Coal Center, Pennsylvania, that should grow the company's melting capacity by 16mn lbs to 42mn lbs annually.
All those additions could lead to a run-up in scrap prices because of greater competition by melters for the same units, while longer lead times to get milled titanium products into machine shops creates a lag effect that leaves downstream generation largely unchanged.
Trump-induced uncertainty
A major source of uncertainty for next year centers around Trump's tariff policies, which have caused concern in the market.
Trump campaigned on vows to levy 60pc duties on shipments from China, and more recently pledged 25pc duties on shipments from Mexico and Canada, and a 20pc duty on all other imports. If those come to fruition, it would increase costs for imports of titanium scrap — currently freely traded for all countries except China.But the tariff threats could also be Trump's way of generating negotiating leverage for his aims.
"A duty on scrap from Europe and Japan would be a disaster for the industry," one source said.
US titanium scrap imports reached 23,578 metric tonnes (t) through January-October, eclipsing the 22,453t sent in the same period in 2023 — a four-year high — and nearing pre-pandemic levels.
