Toho Titanium Expects for Lower Sponge Export Price for 2010 Shipment

Toho Titanium revealed at a press conference on Friday its titanium sponge export price for 2010 shipment is highly likely to decrease compared with 2009 shipment. The export price may decline for 2 years in a row. Inventory adjustment hasn’t progressed at sponge users due to airplane makers’ delivery delay of new model aircrafts. Takeshi Kurushima, president of Toho Titanium, said they try to limit price down range by 10% year-to-year.

Toho Titanium’s sponge export price surged by 30% year-to-year in 2005, by 20% in 2006, by 30% in 2007 and by 10% in 2008. The price maintained upward for 4 straight years. Airplane production increased thanks to passenger number growth in emerging countries. At the same time, global demand for titanium largely increased from chemical plants, power generation plants and seawater desalination plants.

The demand turned downward in the second half of 2008 along with global economy deterioration. Toho Titanium’s sponge export price lowered by about 15% for 2009 shipment compared with 2008 shipment. Mr. Kurushima explained they unusually concluded half-year contracts with some users, though one-year contracts are basic, because the demand condition was totally unforeseeable at the beginning of 2009. As to these half-year contracts, the export price was additionally lowered by several percentage points for the second half of 2009.

Sponge export price negotiation for 2010 shipment is likely to start in December. Delivery of new model aircrafts, Boeing 787, has been postponed by 5 times so far. The export price should decline with no positive factor. Meanwhile, Toho Titanium showed a stance not to approve half-year contracts for 2010 shipment.