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Ferro-titanium producers have held back from ramping up output in September because of narrow margins, and are looking for alloy prices to rise or scrap prices to fall in October.
Ferro-titanium prices on the European market have been sliding in the past two weeks on limited spot buying and lower prices concluded on some long-term contracts. Spot prices for 70pc-grade alloy were assessed down by 5¢/kg today at the high end to $4.15-4.30/kg Ti duty paid for Russian material and $4.40-4.55/kg Ti duty unpaid for Western standard grade lump in-warehouse Rotterdam. The market has fallen from $4.30-4.50/kg Ti for Russian grade and $4.50-4.70/kg Ti for Western grade earlier this month.
A bottleneck in crushing capacity in Europe — partly attributed to a recent fire at a warehousing facility — has resulted in a premium for crushed 0-2mm fines, for which demand has been more active than for lump. And there was a widening premium for extra-low aluminium alloy, which has continued to trade above $5/kg regardless of the fall in standard grade, on a comparatively high cost of steelmaking-grade titanium sponge and high-quality titanium scrap.
At the same time, scrap prices did not react in line with the drop in alloy prices. TI-6Al-4V alloy unprocessed turnings for ferro-titanium feedstock were assessed at 93-98¢/lb ddp UK works, down by only 1¢/lb from the previous assessment on 19 September, and there were offers above $1/lb from the US market for shipment.
But ferro-titanium melters were caught between the steady feedstock costs and falling alloy prices in a thinly-traded spot market. European steel mills, faced with a slower manufacturing cycle in the automotive industry, have been reluctant to invest in additional raw material inventory close to the end of the third quarter.
There has been stronger demand from India and China, where buyers have been accepting higher prices than in mainland Europe, but the arbitrage to the US is narrowing, as increased competition in the US market has sent prices down further. The US market for 70pc-grade alloy has fallen steadily in the past month to $2.05-2.30/lb ($4.52-5.07/kg), from $2.16-2.36/lb.