Japanese 2 Titanium Sponge Makers Post Losses in 1Q F2010

Japanese 2 titanium sponge makers, Toho Titanium and Osaka Titanium Technologies, posted operating losses for April-June 2010 due to slow recovery of titanium business. Osaka Titanium was also suffered from sales decrease of polycrystalline silicon since suspension of production facilities.

Toho Titanium posted quarterly operating loss in April-June for 2 years in a row. The firm posted 256 million yen loss in Titanium Metal business unit for April-June with the unit’s net sales at 3.24 billion yen, decreasing by 22.8% year-on-year. Osaka Titanium’s Titanium business unit posted 7.3% year-on-year lower net sales at 4.55 billion yen for April-June.

Global demand has recovered for titanium. The 2 sponge makers’ export has increased mainly for airplanes thanks to progress of customers’ inventory adjustment. Meanwhile, domestic titanium demand didn’t return to the level as high as in April-June 2009 though the market hit the bottom. Osaka Titanium’s titanium net sales increased by more than 9% year-on-year for export while decreased by 19% fro domestic market.

In June, Japanese titanium material export hit 1,199 tonnes, according to Ministry of Finance. The export volume hit the secondly highest record following 1,201 tonnes in October 2007, increasing by 24% month-on-month and by 46% year-on-year. The export seems to have contained domestic inventories since Japanese 2 titanium sponge makers are still in operation rate as low as 50-60%.

Japanese titanium material export upturned from the recent bottom of 569 tonnes in December 2009 and sharply increased for May-June. The volume upturn seems to reflect offshore demand recovery for airplanes. In June, Japanese material export was 654 tonnes for USA and 455 tonnes for UK.