Thanks to the steady level of inventory in the aviation market, the potential for high aircraft production rates and accurate delivery targets, titanium demand in 2017 is expected to accelerate growth.
A research agency said, in the past two years, including the aviation stock market has maintained a downward trend, it also hinders the development of industry, but in recent times, the market began to pick up, the data also have better momentum. The potential for high aircraft production rates and accurate market goals makes the demand for titanium in the civil aircraft market also improved. The number of aircraft is increasing, such as Boeing 737Max and Airbus Company A320neo aircraft.
The aviation industry consumes 50% of the world's titanium annually, while other industrial markets, including desalination, chemical processing and energy industries consume up to 30% of titanium annually. Military defense accounted for 10%, medical gold and other commodities accounted for each of the 5%. Compared to the aviation industry, the proportion of industrial market share is small, but still optimistic about titanium. Industrial market is expected to improve in 2017, titanium production cycle has begun to describe the buyer's attitude has become positive, good prices are expected to appear in the second half of 2017. Titanium suppliers' production cycle in the fourth quarter of 2016 was $23.8 for the first quarter of the week for the week of 19.6. However, the price of titanium is still in a weak state, the supplier's operating rate is less than 60%, the current market and no price leverage theory, standard aviation 6Al-4V ingot prices remain at $8 / pound. AMM assessment report November 6Al-4V ingot at 8~8.25 USD / lb. In 2017, the price may be better, but the move is not obvious, the effect is likely to be 2018 to 2019, can be seen, the premise is the development of a good situation. The price of titanium has remained stagnant because the price of residual waste has been lower than the cost of ingot production.
When demand is strong in the industrial market, this will drive demand for titanium scrap. But the end result is that the current market is still absorbing digestion last year's supply, the problem is overcapacity.
Titanium demand is expected to grow by 6% to in 2017. However, the demand for aviation, titanium scrap and the macro economy is the three wildcard, leading the prospect of titanium. Aviation power market outlook is good, the current inventory reduction, production led aircraft orders, parts market is also seen as a potential market.