Oversupply for Low Grade Sponge Titanium

Sponge titanium supply turned into oversupply for lower grade, which is used for steel making additive. The international spot market price is US$ 18-22 per kilogram for product with 99.6% purity, which is 30-40% lower than the peak in spring 2005, according to Reuters. The supply keeps tight for high grade products, which is used for airplane and other industry while the lower grade supply expands when Chinese smelters expand the capacity. Japanese titanium ingot and powder import was 3,443 tonnes in January-July, of which import from China represented 972 tonnes or 28%, according to Ministry of Finance. The total import was 1,715 tonnes in same period of 2006, of which import from China was only 9%. The high grade products supply is tight due to the limited supply sources including Sumitomo Titanium, Toho Titanium and limited makers in CIS and USA. Chinese makers cannot produce such high grade products yet and produce only lower grade and are expected to take more time to make high grade products. Chinese sponge titanium output capacity is expected to reach 100,000 tonnes in 2010 compared with 40,000 tonnes in 2006. The higher capacity could keep the oversupply status for low grade market.