Osaka Titanium to Widen Sponge Output Cut Range to 40% for Apr-Jun

Osaka Titanium Technologies will widen output cut range of titanium sponge to above 40% against its capacity in April from current 30%. Titanium demand has dropped down from airplane parts and ship heat exchangers. The firm decided to decrease titanium sponge production to approximately 1,500 tonnes per month when titanium shipment is expected to shrink for Japanese titanium manufacturers in fiscal 2009 starting April.

Osaka Titanium Technologies had expanded titanium sponge output capacity at Amagasaki plant, Hyogo, Japan by 8,000 tonnes to 32,000 tonnes per annum and started operation of new facilities in October 2008. However, titanium market suddenly turned downward. The firm reduced sponge production by 10% against the capacity for October-December and widened the output cut range to 30% for January-March. The firm decided continuous output reduction by additional 10% or more for April-June.

The firm has suspended 5-tonne and 7-tonne small furnaces at Amagasaki plant for optimization. Meanwhile, the firm decided to postpone next-stage expansion by 9,000 tonnes per annum scheduled to start operation in July and October 2009 to 2011.

Titanium demand turned weak in summer 2008 when the shipment delay problem emerged for Boeing’s new airplane B787. A long strike occurred at Boeing almost at the same time and inventory of rolled titanium products surged worldwide. Demand for plate-type heat exchangers, those which consume much pure titanium plates, plunged especially from shipbuilding industry. Titanium orders are also canceled from chemical and seawater desalination plants.