Titanium Scrap Price Sharply Declining

International titanium scrap price is sharply decreasing. The market price almost halved to 1,000-1,500 yen in Japan for high grade titanium scrap used for rolled titanium products compared with last summer when the price surged up due to strong demand. The orders from USA have declined since the second half of 2006 and currently almost stopped. Surplus titanium scrap is stocked at Japanese domestic dealers’ sites. The price down seemed to occur due to rapid increase of Chinese titanium sponge export.High grade titanium scrap is re-melted and used for rolled titanium products while low grade scrap is used as additives for special steels. The market price dropped down firstly for high grade titanium scrap which competes with Chinese titanium sponge.Chinese titanium sponge production was estimated at around 10,000 tonnes per year in 2006. The production seems increasing currently and is expected to exceed 10,000 tonnes in 2007 thanks to operation start of Chinese new titanium plants. All of the increased titanium sponge seems to be exported for USA at cheaper price of US$ 12-13.The market price of low grade titanium scrap is also decreasing impacted by high grade scrap. Japanese scrap dealer source said low grade titanium scrap price is declining to US$ 8-10 with stagnant purchasing from USA and Europe. The market price is also decreasing to around US$ 6 for ferrotitanium with 70% titanium at overseas. Titanium scrap price is totally weakening.