EUROPEAN COMMISSIONJOINT RESEARCH CENTRE

INSTITUTE FOR PROSPECTIVE TECHNOLOGICALSTUDIES

SEVILLE

A Technological and Market Study

on the Future Prospects

for Titanium to the Year 2000

EUR 17343 EN

Elizabeth Marsh

November 1996

Copyright and Legal Notice

The views expressed in this study do not necessarily reflect those of theEuropean Commission (EC).

IPTS retains copyright, but reproduction is authorised provided thesource is mentioned: neither the European Commission nor any person

acting on behalf of the Commission is responsible for the use whichmight be made of the following information.

Background to the report:

This report stems from the IPTS’ activities in the application and development of “Advanced Materials. Within thescope of these activities, titanium and its alloys appeared to have a minimal use in low tech or high volume sectors,for example, the automotive, medical or construction industries, despite the attractive properties for their use. Whatwas known was that titanium has had a long history in the aerospace and defence industries.

For this reason Elizabeth Marsh was invited by the European Commission Joint Research Centre’s Institute forProspective Technological Studies to carry out the study. The author was chosen for her experience in reporting onadvanced materials and technologies, which she has done on behalf of Elsevier and British Gas, amongst others.

The report provides a detailed insight into the activities of the titanium industry as it is today, provides backgroundinformation on how it has arrived at its current state as well as giving some indications as to the industries futureprospects. The report demonstrates how the industry has strongly depended on demand from the aerospace anddefence industries and that now, in a time of cut backs and rationalisation in these sectors, the industry stands at acrossroads between continued dependency on a market with fluctuating demand or diversification and innovationinto new sectors.

The lessons being learnt by the titanium industry are by no means applicable solely to it, but can also be identifiedwith all those industries that flourished in times of high defence spending and aerospace contracts, but now facereduced demand from more stringent budgets. The threat to these industries is not only one of financial and joblosses but also one of a disappearing experienced workforce which has been built up over many decades. The needto diversify and preserve the knowledge base is essential.

J. R. Naegele, T. S. Amorelli

IPTS, Seville

Contents

Executive Summary

1 Introduction 11.1 Properties and use 11.2 Present market status 3

1.2.1 Introduction and assessment 31.2.2 Production 41.2.3 Markets 71.2.4 Future prospects 8

1.3 Standards 10

2 Titanium materials and their production 112.1 Sources of titanium ore 112.2 Methods of production 12

2.2.1 Introduction 132.2.2 Production 132.2.3 Manufacturing methods 17

2.3 Titanium alloys 172.4 Composite materials 182.5 Intermetallic materials 192.6 Coatings 20

3 Environmental impact 213.1 Emission problems 213.2 Life cycle assessment 213.3 Recycling 22

4 Social impact 244.1 Employment 244.2 Skill base and training 244.3 Technology transfer 254.4 R&D investment 26

5 Applications 295.1 Introduction 295.2 Aerospace 30

5.2.1 Introduction 305.2.2 Military aircraft 315.2.3 Commercial aircraft 32

5.3 Defence 325.4 Automotive 335.5 Bio-medical 345.6 Leisure and recreation 365.7 Industrial 36

5.7.1 Chemical processing 365.7.2 Flue gas desulphurisation 375.7.3 Offshore and marine 385.7.4 Desalination 395.7.5 Power plant 40

5.8 Building and construction 415.9 Other applications 41

5.9.1 Fusion 415.9.2 Food preparation 425.9.3 Paper and pulp 42

5.9.4 Cutting tools 425.9.5 Electronics 425.9.6 Superconductors 435.9.7 Consumer Goods 43

6 Geographic markets 446.1 North America 446.2 Japan 466.3 Europe 496.4 Former Soviet Union 496.5 Other 50

6.5.1 South East Asia 506.5.2 India 516.5.3 Middle East 51

7 Markets and forecasts to 2000 527.1 Markets 527.2 Market value 547.3 Forecast to year 2000 56

8 Company information 588.1 General inforamtion 61

9 Company directory 64

List of Tables

Table 1 World titanium active sponge capacity (000s tonnes) 5

Table 2 Japanese sponge and ingot capacity 6

Table 3 World production of Ilmenite and Rutile (000s tons) 12

Table 4 The % use of materials in military aircraft 31

Table 5 US titanium sponge and slag requirements (000’s tonnes) 44

Table 6 US imports for the consumption of titanium metal (000’s tonnes) 44

Table 7 US exports of titanium products 45

Table 8 Market distribution of titanium mill products in Japan 47

Table 9 Japanese titanium shipments 48

Table 10 Destination of exports of Japanese titanium sponge 48

Table 11 Destination of exports of Japanese mill products 48

Table 12 Source of imports of titanium sponge to Japan 48

Table 13 Source of imports of titanium mill products to Japan 48

Table 14 Production and shipments of titanium mill products world-wide (000s tonnes) 53

Executive Summary

The value of the titanium industry up to the fabrication stage is well in excess of $1,000 million, beyond that the valueadded nature of manufacture makes calculation impossible although the Japanese industry has been estimated at $500million which would indicate a world figure well in excess of $2,000 million..

The problems for the titanium industry are not technical but economic and have their roots in the too-close connectionto the aerospace industry in Europe and the USA. This link has operated to the detriment of industrial developmentswhich would give a wider market base and spread the load between aerospace demand cycles. The aerospaceconnection has also resulted in production processes which are not suitable or too stringent for industrial applications.

There are also educational problems with end user industries but these are still linked to the commercial situation;users will not specify titanium if they are uncertain of price or supply. In December 1995 there are already supplyproblems which indicates a repeat of the "boom and bust" situations of previous decades. There are indications thatthese problems, which have been identified over many years, may now be addressed by the industry but time is not ontheir side. Most previous boom periods have lasted for 2 years and the current one is now nearly twelve months old,there are price rises of 30% for materials and development of the industrial market may be too late.

The situation can be summarised as follows:

• the production processes for Europe and the USA are frequently based on the requirements for the aerospaceindustry with small production lots and hand finishing which increases the price. The Japanese who havedeveloped industrial markets use automated production methods

• titanium use rose out of the aerospace industry which is a cyclical industry. US defence cuts resulting from the"Peace Dividend" had a major effect on the US titanium industry. Currently, there is the beginning of a boom asnew aircraft are ordered and lead times are up to 52 weeks which is not acceptable for industrial markets

• price is a factor in the limited demand for titanium which is perceived to be expensive. The high energy costs inits production will have an impact on the finished cost but so will limited production processes and unstablemarkets

• companies make considerable losses during the "down" times and consequently increase prices during the"boom" times in order to compensate for those losses; there have been price rises of 35% in the last year. Evenwith the current increase in orders US, British and Japanese companies are making losses

• partly because of the cyclical nature of the industry, depreciation has exceeded investment in the US titaniumindustry over the last 5 years and similar situations obtain in other geographic areas. The large investments in theindustry in previous decades have not been repaid by increased markets

• the development of a industrial markets takes long, consistent effort and this does not accord with the short-termviews of many European and US companies. Such applications as chemical processing plant are the result oflarge capital expenditure for new plant or considerable sales effort in the replacement market. Much of this plantis for South East Asia and requires development with the major plant suppliers

• the development of alternative markets including industrial, building, consumer and leisure will requireconsiderable marketing efforts and work with end users and customers. It will also require the development oflow cost alloys

Russian titanium - both finished metal, scrap and sponge - has caused problems in the international markets over thelast 3 years. The FSU had large quantities of material, an urgent need for hard currency and a naive approach tomarkets which has impacted on the titanium and ferro-titanium industries. However, this situation is not new, hasoccurred in the 1970s and 1980s and there is little evidence outside the efforts of the VSMPO to achieve a commercialapproach.

• Because there is a strong requirement for titanium alloys for the aerospace industry, rather than low cost alloys forindustrial applications developments in other metal industries can affect the titanium industry e.g. increases in theprice of vanadium led to price increases for the standard titanium alloy Ti-6Al-4Va. The small size of the industryleaves it vulnerable to these increases

• there is a need for internationally accepted standards as the specific but differing requirements of the large aircraftcompanies for material which may be chemically identical leads to small batch production. Titanium is notincluded in the Versailles project on Advanced Materials and Standards (VAMAS) programme

• advanced materials are used in areas which need their special properties - aggressive or corrosive environments,structural or thermal requirements. By their nature advanced materials will frequently be more difficult to use inmanufacture - joining, welding, milling etc which need training courses. In many cases their use will imply a re-design to make better use of their characteristics and such design can be time consuming and expensive

• titanium is too often perceived by end-user industries as exotic, expensive and difficult to work and an extensiveeducation programme is needed

• reliable statistics on production and capacity are not available on which to base sound investment ormanufacturing decisions

• there are well-developed trade associations in Japan and the USA but not in Europe. A European body,particularly if it included the FSU, could act as a focus for development. A Titanium Information Group has beenformed in the UK but is not a trade group for Europe

As with all industries there is a continuing need for technical developments. However, the major requirement is not forsome new alloy or joining technique but for someone to break into the vicious commercial circle which is limiting thegrowth of the industry. The industry is well aware of its problems as the following quote from Oremet, US, indicates:

"..a combination of increased raw material costs, production inefficiencies and an unfavourable mix of low-marginaerospace shipments was responsible for the downturn in results."

However, the US industry which drives much of the market may be unwilling to learn from the Japanese approach tothe long-term development of industrial markets as this quote from RMI, US which has developed industrialapplications, indicates:

"...[first] operating profit reported since the first quarter of 1991 and reflects the continuing improvement in demandfor titanium in aerospace markets"

The aerospace industry will always be important to the titanium industry particularly for alloys but increasingapplications for commercially pure titanium or lower cost alloys are now being sought. The titanium industry has todevelop original applications or to attack the market for stainless steel and other corrosion resistant materials. Thecomposites industry, which faces many of the same problems, will also target many of the applications including therecreation and leisure industry. Without assured supplies and prices, volume industries such as the automotive industrywill not consider titanium

The re-grouping in the industry including the merger of Timet, USA and IMI, UK and the position of Deutsche-Titanand Titania SpA may give a stronger financial base although the position of Cezus, France is now uncertain.

Essentially, the titanium industry is at a crossroads. If the umbilical link to the aerospace industry continues, thecurrent "boom" will, as in previous decades, be shortly followed by a "bust"; most booms have only lasted between 2-3 years and this one is now a year in progress which would indicate that by 1998 the industry will again be indepression.

An excellent presentation by Charles Rivers Associates, USA in 1991 encapsulated the problem then as:

• a need to reduce titanium mill product cost

• convince potential users of sustained supplies at reduced cost

• develop new alloys specifically tailored to non-aerospace applications

• work towards cost reduction in secondary fabrications

• offer technical support and training centre

• develop estimates of cost effectiveness for target applications

The situation 5 years later has not changed.

1

1 Introduction

Although titanium is the fourth most abundant structural metal in the Earth’s crust (0.6%), qualities sufficient forengineering purposes only became available in the late 1940s. During the period 1932-1940 Dr W.J. Krollworked on a method of reducing titanium tetrachloride by passing it into a bath of molten magnesium to producea coke-like mass of titanium known as "sponge" and this marked the beginning of commercial use of the material.Prior to that development the presence of relatively small amounts of common impurities such as oxygen,nitrogen, carbon and hydrogen, all of which dissolve in and embrittle the metal, had prevented its economicexploitation. However, in 1948 the US Bureau of Mines had only managed to produce a mass of just 230 lbs sothe material has a commercial history of less than 50 years.

1.1 Properties and use

Titanium offers good corrosion resistance in most environments, excluding those containing fluoride ions whereit cannot compete with some ceramics, tantalum and various high-nickel alloys. In fluoride-free environments,titanium is cost effective when competing with high-alloy, corrosion-resistant materials such as Hastelloy C-276but has not displaced that product in the market.

When compared with stainless steel, titanium has a much superior technical performance but would not beselected over commodity products such as ferritic and austenitic stainless steels as it is not cost-effective.Competing in those markets where these stainless steel products fail is difficult as the steel industry has anaggressive product development programme. Titanium must be cost effective when compared with highperformance ferritic, superaustenitic and duplex stainless steels.

A number of factors affect the deman d for titanium in industrial applications, not the least of which is cost-effectiveness which depends on the following factors:

• the cost of titanium sponge and scrap of suitable quality. Titanium sponge cost is primarily a function of themineral feed cost and energy cost

• the value added in melting and primary fabrication. This is a function of product specifications - tolerancesand finishes. Certain stringent aerospace requirements that lead to high costs are not necessary in non-aerospace applications

• low cost processing with efficient high-volume mill equipment rather than the current small, batchprocessing

• the value added in component fabrication which is partly derived from the extensive non-destructive testingwhich is necessary for the aerospace industry and can be relaxed for non-aerospace applications

• the functional cost of competing materials taking account of price per unit weight, differences in density,corrosion and other performance factors

• the availability of commercial products including alloys, shapes, sizes and types which are designed fornon-aerospace applications and have adequate engineering data for design specifications

• effective market development and technical support including down-stream elements such as designassistance, training in fabrication and on-site welding

• resistance from component manufacturers to change practises or make capital investments which wouldencourage the production of titanium components. There has been resistance to the use of titanium forautomotive valves.

It is rare for an application to be satisfied by a single material and titanium must compete in a fast developingmarket for advanced materials. Whenever aluminium is technically adequate for an application it will bepreferred to titanium because of its lower density and cost. Polymers have a significant density advantage overtitanium but engineering polymers are expensive and also lack an extensive base of standards and designspecifications.

Studies have indicated that the target industrial end uses that are available for titanium expansion exceed thecurrent market by a factor of 4. The markets serviced by cupronickel 90/10 and cupronickel 70/30, 316 stainlesssteel, superferritic stainless steel, superaustenitic stainless and Hastelloy C-276 should all be targets, although to

2

attack the 316 stainless steel market will call for price reductions in titanium products and considerably improvedmarketing. The US-based Charles Rivers Association has devised the "1-10-100 rule" which notes that a $1 perpound reduction in sponge cost, combined with a 10% reduction in manufacturing cost should lead to a 100%increase in the demand for titanium in non-aerospace applications.

Titanium alloys are highly resistant to water, natural water and steam to temperatures above 300oC with excellentperformance in high purity water and fresh water. Titanium is immune to microbiologically influence corrosion.The typical contaminants found in natural water such as the oxides, sulphides, sulphates, carbonates and chloridesof iron and manganese do not compromise performance and titanium is totally unaffected by chlorinationtreatments used to control biofouling.

Titanium is fully resistant to natural seawater with corrosion rate well below 0.0003mm/year on titanium exposedbeneath the sea, in marine atmospheres and in splash and tidal zones. In the sea titanium alloys are immune to allforms of localised corrosion and withstand seawater at flow velocities exceeding 30 m/second. Abrasion andcavitation resistance is considered outstanding and the fatigue strength and toughness of most titanium alloys isunaffected in seawater.

When in contact with other metals in seawater, titanium is normally a cathode and this may accelerate the attackon other active metals such as aluminium, and copper alloys. The extent of galvanic corrosion will depend on theanode to cathode ratio, seawater velocity and seawater chemistry and can be avoided by the use of coatings,linings and cathodic protection or dielectric (insulating) joints.

Titanium has excellent resistance to gaseous oxygen and air at temperatures up to 370oC. Between 370-450oCcoloured surface oxide films are formed which thicken slowly. Above 650oC titanium alloys lack resistance andbecome brittle due to the diffusion of oxygen in the metal. Combustion can occur in circumstances where theconcentration of oxygen is above 35% with pressures over 25 bar when a fresh surface is created.

Titanium is highly resistant to alkaline media including solutions of the hydroxides of sodium, potassium,calcium, magnesium and ammonium. In some circumstances applications in sodium or potassium hydroxidesolutions are limited to temperatures below 80oC as excessive hydrogen uptake can cause embrittlement.However, even at higher temperatures titanium resists pitting, stress corrosion and caustic embrittlement. Theresistance of titanium to acids has also proved beneficial in chemical processing plant and in flue gasdesulphurization environments. Titanium alloys are resistant to an extensive range of acidic conditions includingoxidising, reducing and organic acids, nitric acid including red fuming nitric acid and hydrofluoric acid.However, acidic aqueous fluorides and gaseous fluoride environments can cause corrosion of titanium.

Titanium alloys are highly resistant to wet chlorine, bromine, iodine and chlorine compounds because of theirstrongly oxidising natures which passivate titanium giving low corrosion rates. These qualities make titaniumvery useful in the chemical processing industry. Titanium is widely used to handle moist or wet chlorine wherealloys can control the possibility of crevice corrosion at temperatures above 70oC. Dry chlorine can cause a rapidattack of titanium and may even cause ignition if the moisture content is below 1%.

Titanium is also resistant to attack by a wide range of natural and chemical environments and has extremely highresistance to pitting and stress-corrosion cracking. In many applications, particularly those in the presence ofchlorides, its corrosion resistance is superior to that of stainless steel. The performance of titanium in suchcorrosive agents as sea water, chlorine, chlorite and hypochlorite solutions, nitric acid, chromic acid, metallicchlorides, sulphides and organic acids is considerable. Anodically protected by a small impressed voltage,titanium withstands attack by a wide range of aggressive chemicals. Its resistance to dilute reducing acids is alsomarkedly improved by the addition of small quantities of palladium.

Titanium is resistant to solutions of chlorites, hypochlorites, chlorates, perchlorates and chlorine dioxide whichmakes them suitable for the pulp and paper industry. Titanium can be used in chloride salt solutions and otherbrines over the full concentration range especially at increasing temperatures and shows near-nil corrosion inbrine media at pH 3-11. Oxidising metallic chlorides of iron, nickel and copper extend titanium passivity to evenlower pH levels. Some localised pitting or corrosion in tight crevices can be a problem with unalloyed titanium

3

although crevice corrosion will not occur in commercially pure titanium or industrial alloys below 70oCregardless of pH. Some crevice corrosion may occur in sea water and neutral brines above boiling point butattention to design can prevent the occurrence of crevices. Traditionally 0.15% of palladium has been included inthe alloy which greatly increases resistance to crevice corrosion for titanium alloys. Palladium is very expensiveand the introduction of this small percentage virtually doubles the cost of the alloy. However, recent work hasindicated that the palladium content can be reduced to 0.05% for most applications. Alternatively the palladiumcan be replaced by 0.10% of ruthenium. The lower palladium addition restricts the increase in cost to 30% whilstthe addition of ruthenium increases the cost by only 10%.

The ruthenium-enhanced alloys are a new development and are being specified in such commercial activities aswet oxidation, deep sour gas, hydrometallurgy for mining, geothermal wells, offshore platforms and subseasystems.

Other solutions for which titanium alloys have good resistance include sulphates, sulphites, borates, phosphates,cyanides, carbonates and bi-carbonates. There is also good resistance to oxidising anionic salts such as nitrates,molybdenates, chromates, permanganates and vanadates and with oxidising cationic salts including ferric, cupricand nickel compounds.

Nitrogen reacts more slowly with titanium than oxygen although, at temperatures above 800oC excessivediffusion of the nitride can cause embrittlement. However, titanium is not corroded by liquid anhydrous ammoniaat room temperatures.

Titanium and its weldable alloys can be joined by fusion, resistance or other welding methods but not to othermetals. Joining to other metals requires mechanical methods such as rivets, bolts, adhesives or by brazing frictionwelding or explosive bonding. The density of titanium at 4.51 Mg/m3 is mid-way between that of light alloysbased on aluminium or magnesium and the steels and nickel alloys. Titanium retains useful strength attemperatures substantially higher than those considered safe for the more conventional light alloys and it is thusan attractive structural metal for applications demanding high specific strength at temperatures ranging from sub-zero to more than 500oC.

Titanium is being used in a wide range of applications:- aero-engines, airframes, automotive, building,condensers, cryogenics, desalination, downhole logging, electrochemical anodes, flue gas desulphurisation, heatexchangers, jewellery, leisure and recreation, marine, medical and dental implants, metal extraction, offshorepiping and risers, petrochemical refineries, pulp and paper, springs, turbines, ultracentrifuges, valves, wet airoxidation.

The major use of titanium in the USA is in the aerospace industry with some 70% of titanium metal, but thispercentage is lower in Europe where some 50% of the metal is used in the chemical and engineering industries.Japan, without a major aerospace industry has an even higher percentage use in engineering and chemicalprocessing and has also pioneered some imaginative alternative uses for the material with some 44% of theproduct in the leisure and recreation industries.

1.2 Present market status

1.2.1 Introduction and assessmentThere are three main problems in defining the current market status of titanium:

• the difference between capacity and production• the difference between purchase for use and purchase for inventory• the lack of reliable statistics

A problem found in any industry, is the difference between capacity and production but as with other aspects ofthe titanium industry the effects are exaggerated. It is estimated the VSMPO, the Russian manufacturer, hascapacity of over 100,000 tonnes of titanium mill products from 47 furnaces with a further 40 furnaces at anotherlocation; for comparison purposes IMI, UK have a capacity of 6,000 tonnes from 5 furnaces. However, estimatesof actual production by VSMPO vary between 10,000-15,000 tonnes - their exports for 1995 are 5,500 tonnes.

4

In 1994 US ingot capacity was 61,400 tonnes although actual production was 29,500 tonnes. In the 1980sproduction for sponge and ingot was frequently only 30% of capacity and there are industry reports thatproduction, labour and transport problems combined with an increase in energy costs have FSU spongeproduction running at 50% of capacity. The Zaporozhye works in the Ukraine are reported to have ceasedproduction and the Berezniki works in Russia is in difficulties. FSU sponge manufacturers are reported to behaving problems in obtaining magnesium feedstock and Ust Kamenogorsk, Kazakhstan being landlocked andwith poor road infrastructure, has transport difficulties.

1995 has seen major increases in orders for titanium but industry sources indicate that at least part of this can beattributed to a fall in inventories below normal levels including the inventories for military aircraft manufacturers.The low stock levels triggered orders although the material is not for immediate use which may indicate a fall inorders later in 1996 when inventories have been replenished.

A major problem in the assessment of the titanium market is the lack of reliable statistics. The Japan TitaniumSociety has attempted to persuade the industry world-wide to contribute to joint statistics but there isconsiderable reluctance by some portions of the industry. Apart from normal commercial considerations, this ispossibly left as a reminder of the secrecy which surrounded titanium use for military and aerospace applications.However, the lack of reliable statistical information as a basis for commercial judgement is hampering industrialdevelopments.

Japanese titanium manufacturers, through the Japan Titanium Society have been remarkably open with statisticson their manufacturing capacity and hope to encourage other suppliers to be equally open. The US InternationalTitanium Association also collects statistics for the major US market but the lack of a trade association in Europewhich already hampers titanium developments also limits the collection of statistical information and mostEuropean (and FSU) figures are based on guesswork.

One major problem in assessing Russian (and Chinese) involvement in the titanium markets is a lack of goodstatistics. In 1956 a Soviet law was passed which made it a treasonable offence to reveal any information on non-ferrous production and no trade data was issued after 1975. The Titanium Association in the FSU is alsohampered by the growing commercial awareness of the companies which leads to rivalry and the lack of a strongcentral authority following the separation of the states of the old Soviet Union. The US Bureau of Mines hasmade estimates including one for 1984 of production of 60,000tpa. There were 5 sponge plants one of which -Ust Kamenogorsk, Kazakhstan, has, at least, 25,000tpa capacity. In 1989, FSU production was reported to beover 100,000tpa but this may have declined to 15,000 tonnes in 1995 of which a high proportion is exported.

1.2.2 ProductionThe chain of titanium production commences with sponge production although mill product figures must besupplemented by the amount of scrap added for ingot production and decreased by losses in production. Thefigures on sponge capacity (Table 1) are open to interpretation and may be an under-estimate by 20,000tpa. Muchof the plant listed below as taken out of commission could still be available although not useable due to its age orinefficiency. Figures for the FSU and China are open to interpretation. However it is generally agreed thatproduction is considerably less than capacity and world production is reliably given as of the order of 50,000tonnes.

Ingot capacity for the US in 1994 was some 61,400 tonnes of which 6,000 tonnes was single melt (electron beamand plasma) capacity. US consumption for 1994 was 27,000 tonnes and this has increased in 1995 to 34,000tonnes; world ingot production for 1995 is estimated at 40,000 tonnes compared to 34,000 tonnes in 1994.

5

Table 1 World titanium active sponge capacity (000s tonnes)Country/company Capacity 1984 Year closed Capacity 1994

USATimet * 14 1994 (Kroll) 22.7*RMI 10.5 1993IMI Titanium 9.5 1992 -Oremet Titanium 4.5 - 6.8Teledyne Wah Chang 1.5 1986 -International Titanium 2.5 1987 -Western Zirconium 0.5 1986

JapanSumitomo Sitix** 20 - 16.5Toho Titanium 13 - 12New Metal Industries 2.5 1987 -Showa Denko 2 1994 -

UKDeeside Titanium 5.5 1993 -

FSUAVISMA 40 - 25Berezniki (Russia)Ust’Kamenogorsk (Kazakhstan) 40 - 40Zaporozhye (Ukraine) 20 1994

China 3 - 3

Total 170.5 - 126

*Includes a Kroll plant with 5,000 tonnes capability which could be re-activated as it was in early 1994** Previously Osaka Titanium

The current market shipment of titanium mill products, world-wide, is between 50,000 - 100,000tpa, someestimates indicate 35,000tpa but this is probably too low. Japanese production is 9,000tpa and the Europeancapacity of 10,000tpa is probably operating at 65% as IMI is reported to have taken one furnace out ofcommission following an accident. US production of 42-45 million pounds for 1995 will be split between 13-14million pounds for non-aerospace (increasing from 10 million pounds in 1994), 20 million pounds forcommercial aerospace (increasing from 17 million in 1994) and 7 million pounds for military aerospace, which isrelatively static. There is also material coming from the FSU. These figures are modest when compared withother structural materials that resist corrosion. For example, current world consumption of stainless steel (one ofthe major competitors for titanium) is more than 10 million tpa. Even after making allowances for the differencein density of the two materials, titanium has captured, at most, 1% of the market that stainless steel enjoys.

The balance of production between commercially pure (CP) and alloy materials can affect production figures.Commercially pure titanium may be produced as 7.5 tonne ingots whilst alloy material may be produced as 4.5tonne ingot and this latter material will take longer to achieve the same production weight. Manufacturers aim toachieve a balance between CP and alloy production which allows them to best utilise their furnace capacity.

Figures for Japanese capacity were presented at the Birmingham, UK conference in October 1995 by theChairman of the Japanese Titanium Society, Tadashi Moriyasu of Kobe Steel and are given in Table 2 below:

6

Table 2 Japanese sponge and ingot capacity (tonnes per annum)Producers Capacity

Sponge Ingot Mill Products Castings

Sumitomo Sitix 15,000 5,000 X XToho Titanium 10,800 7,800 X XKobe Steel X 7,200 O XNippon Mining X X O XSumitomo Metal X X O XDaido Steel X 600 O XMitsubishi Materials X X O OFurakawa Electric X X O XSumitomo Light Metals X X O XVacuum Metallugica X X X OKanto X 1,800 X ONippon Steel X X O XNKK Corp X X O XAichi Steel X X O X

TOTAL 25,800 22,400

**O indicates capability; X indicates no facilities thus Sumitomo Sitix Corporation produces sponge and ingots but not millproducts or castings.

Japanese sponge production in the first half of 1995 was just over 8,108 tonnes indicating that production wasrunning at about two-thirds of capacity. The figure is a 10% increase on the 7,364 tonne production during thesame period in 1994. Domestic shipments fell 3% to 5,386 tonnes but exports rose 17% to 2,512 tonnes.

Other information indicates that 9,000tpa of mill products were shipped from Japanese producers in 1995 a slightincrease over the figure of 8,600 for 1994.

US domestic consumption of titanium sponge rose to 10,600 tonnes for the first six months of 1995 compared toa total of 17,200 tonnes for the whole of 1994. There was a 27.6% increase in the first quarter alone to give afigure of 11.5 million pounds to which should be added an even greater increase in scrap usage - 38.7% to 11.5million pounds. There has been a considerable shrinkage in the availability of sponge from Western companiesand RMI closed its plant at Ashtabula in February 1993 leaving only Timet and Oremet as producers in the USA.The UK plant Deeside Titanium in which IMI Titanium, UK had an interest was closed in 1994. IMI now buysfrom Japan as do other companies in the USA and Europe although this source was reduced with the closure ofthe Showa Denko sponge plant in Toyama. The FSU has become a serious player in the supply market but withvariable quality, pricing and supply lines which is introducing further complications into the equation.

Timet has the largest sponge production facility in the US producing some 10,000tpa from plant in Henderson,Nevada. Union Titanium Sponge Corporation (UTSC) which is owned by Toho Titanium and several otherJapanese companies put up $75 million in funds and manufacturing technology to renovate and upgrade theTimet facilities and as part of the agreement UTSC is allocated 2,000tpa from the Henderson plant which it sellsin the US. This allotment is now booked throughout 1996 and similar indications for 1997.

Ingot production in the US increased by 41.7% in the first quarter of 1995 over 1994 to 21.1 million pounds andconsumption reached 34 million pounds for the first six months of 1995 compared to 54 million pounds for thewhole of 1994. Industry predictions are for ingot production from the Western world of 80 million poundscompared to 68 million pounds in 1994.

Mill product production rose 14.8% to 11.5 million pounds in the first quarter of 1995. Net shipments of millproducts were up to 20.7 million pounds for the first six months of 1995 compared with 16.8 million pounds forthe same period in 1994 and 34.5 million pounds for the whole of 1994. The 1994 figures compare with theboom years of 1989 (55 million pounds) and 1990 ((53 million pounds) although it is expected that they willrecover to between 40-44 million pounds in 1995.

7

There is no sponge production in Europe following the closure of Deeside Titanium and the four main productcompanies are IMI, UK, (capacity 6,000tpa) Deutsche-Titan, Germany, (capacity 2,500tpa) Titania, Italy(capacity 1,600tpa, largely as a re-roller of FSU material) and Cezus, France (capacity 1,000tpa). It is reportedthat, following an accident, IMI is without one of its 5 furnaces. Europe, particularly Deutsche-Titan and Titania,has been a large buyer of FSU sponge, scrap and metal whilst IMI has made only small purchases and remaincautious about future policy.

In the last 3-4 years the influence of FSU on titanium supply and price has been considerable with very largeamounts of sponge, scrap and metal appearing on the world markets. In 1989-90 VSMPO, which does notproduce sponge, produced some 50-70% of all titanium volume melted world-wide. In 1994, exports fromVSMPO were 3,800 tonnes which was double that for 1993. In the first half of 1995, contracts were signed formore than 4,000 tonnes and deliveries have increased to 5,500 for 1995.

Imports of sponge into the USA were 1,332 tonnes in 1994 and this had risen to 3,620 in the first 5 months of1995. In the last 2 years FSU sponge has formed 80% of sponge imports into the US displacing the previousJapanese imports. Much of the FSU sponge imported to the US is for re-export as in this way it avoids the83.96% anti-dumping duty and 15% tariff. FSU sponge is too expensive for use within the US where these dutieswould apply. FSU exports of sponge to Japan were 2,628 tonnes in the first half of 1995 almost double that forthe same period in 1994.

Chinese exports have also varied from 2,600 tonnes of sponge, scrap and ingot between 1979-1981 but decliningto only 400 tonnes in 1982/3. Capacity is well over 6,000tpa and the country has extensive deposits of titaniumminerals. Current production of ingot at the Baoji plant, which accounts for 80% of Chinese production isestimated at 3,000tpa, with plans for further investment to increase capacity to 5,000tpa.

Titanium bar and billet prices rose by 30-35% in the year September 1994 - September 1995 and strip and sheetproducts which are less dependent on the aerospace industry rose by 20-25%.

1.2.3 MarketsThe major market for titanium products, world-wide, is in aerospace which accounts for 55-60% of total demandalthough with geographic variations. The use of titanium in this industry is an acknowledgement of its highstrength to weight ratio. Applications include airframe parts such as wing mounting brackets, engine pylons andcompressors in the gas turbine engines. Products for this industry must meet stringent specifications and mustfollow a fixed and agreed processing route. Demand in the USA is geared 70% aerospace to 30% industrial, inEurope this is 45% aerospace and 55% industrial whilst in Japan aerospace use is below 5% of production andUS fears of the early 1980s that Japan would invade their aerospace market have not materialised.

The US share of the titanium market and its strong alliance with the aerospace industry impact heavily on theworld titanium industry and cannot be seen in isolation. This is particularly the case with the strong acquisitionpolicy by US companies in Europe. However, the US industry now pays increasing attention to industrial andleisure applications of titanium.

US manufacturers aim to move to greater use in industrial applications with John Odle at RMI predicting a 50:50split by the end of 1997. Japanese manufacturers have a strong emphasis on the consumer market showinggrowth from 4% to 21% of production in the period 1990-1995 and have shown considerable innovation in theapplication of titanium to both industrial and non-industrial e.g. building construction, applications. RMIconsider that the main emphasis will be on heavy wall seamless tube although they note that in 1995 the use oftitanium in golf club heads - more than 3,500 tonnes of titanium-6Al-4V - will exceed the defence market in theUSA. In common with other companies in the titanium industry, RMI also see a future in the offshore industryand are working with Hunting Oilfield Services on the use of titanium on drill platforms costing $4 billion,working at high pressure and descending 300 metres. The contract which was awarded to RMI had also beensought by Deutsche Titan.

8

The second half of 1995 has seen a considerable upsurge in titanium demand and lead times have expanded to 12months in some cases; users in a range of applications are reporting difficulty in obtaining tube and sheet withtube a particular problem. Due to the downturn in the industry during the early 1990s titanium plant had beentaken out of production and there is a time delay in bringing this back. To this must be added a lessening insupplies from the FSU suppliers. All titanium production must be based on sponge production and capacity ofseveral thousand tonnes has been taken out of production. FSU capacity is between 20,000-40,000tpa althoughwith 30% production. US capacity is 10,000tpa at Timet and 5,500tpa at Oremet. Timet is reported to be workingat 76% capacity due to a technical problem and Oremet is reported to be working at full capacity. Japan hasnearly 26,000tpa capacity with Sumitomo Sitix at 15,000tpa and Toho Titanium at 10,800tpa both working at60% capacity or greater. China is reported to have capacity of some 2,500tpa.

Non-aerospace demand in the pulp and paper, petrochemical and similar industries has risen in 1995 asmanufacturers have turned back from polyvinyl chloride and stainless to the more durable titanium for flangesand fittings. US suppliers are looking to growth in export markets away from their domestic market. Chemicalplants, including PTA plants, power stations and similar applications will show greatest growth potential in theFar East and Indian sub-continent and suppliers will have to forge alliances with the major civil engineeringcompanies such as John Brown, Chiyoda and Snamprogetti.

1.2.4 Future prospectsThe problem with the titanium industry is not technical but commercial resulting from a "boom or bust" situationwhich has been a factor of the industry for 40 years. As with all materials, there are technical considerations inthe use of titanium but these are not the major problem although further research on a replacement for the Krollprocess would be beneficial. Titanium has considerable potential outside the aerospace industry for industrialapplications including chemical processing plant, oil rigs, desalination plants and its biocompatibility makes it ofvalue to the large medical implant business. The Japanese have made innovative use of the material includingbridges and for building cladding and roofing.

When the aerospace market declines, manufacturers look for other applications including leisure and recreationwhich are fashion items and are also being targeted by other advanced materials. However, their aerospaceorigins means that they return to that market, from which they have made considerable profits, during the "up-cycle". Additionally, whilst titanium manufacturers look to replace steel and the superalloys, those materials fightback with new developments and the composites (metal, polymer and ceramic) look to overtake titanium in thesame high performance markets. Recent large engines make extensive use of lightweight composites and the fanin the General Electric GE90 is mostly made of composite materials rather than the usual titanium.

Confronted once again with attractive aerospace markets, titanium producers could choose to minimise theirefforts in the industrial sector and return to their aerospace roots. In this case, reduced support would be availablefor a limited and patchy industrial market sector. The industrial market can always find alternative materials andwill not be persuaded to use a material which is turned on and off by the aerospace industry. A consistent, long-term approach is needed to industrial developments which spread and extend the markets available to titanium.However, before such a strategy is accomplished the following will be required:• a reduction in titanium mill costs• a change in climate which convinces potential uses that titanium sponge and mill products will be availableas a sustained cost which is lower than current costs• determine, with target industries, if new alloys are required for specifically industrial applications• reduce value-added component costs through reduction in secondary fabrication cost• establish application engineering and technical support services for a range of techniques including joining• demonstrate to target industries realistic cost savings for titanium

If the industry remains too firmly attached to its aerospace connections, the rollercoaster nature of the titaniumindustry will continue into the next century. There are already indications in December 1995 of supply problemsand increasing prices which would indicate a repeat of the situation in earlier decades.

There are clear historical precedents for the current boom situation. In 1971 the 4 largest producers in the USA,collectively accounting for over 90% of ingot production reported losses of $20 million on a sales volume of $75

9

million. Similar situations existed in Europe and Japan. In 1980 it was predicted that the titanium industry wouldgrow by 7%pa with industrial applications growing at between 12-13%pa As an example, between 1978-1981Japanese manufacturers supplied 3,000 tonnes of titanium tubes solely for desalination plants in Saudi Arabia.Because of a shortage of refining capacity and an accompanying harp increase in the price of sponge and millproducts, titanium producers world-wide increased their production capacity for sponge, melting and millproducts by some 50%. The price of titanium rose to $35 per kilo (90/10 cupro-nickel was $6 per kilo) but themarket collapsed in 1981. Between 1980 and 1983 the production of mill products in the US dropped 39% andindustrial consumption which had peaked at 12 million pounds in 1981 dropped to 7 million pounds in 1983. Theindustry was operating at 50% capacity as a result of increased sponge capacity and decreased consumption withthe inevitable result that sponge and mill product prices decreased. The list price for sponge declined by 50% incurrent dollars and by 1986, taking inflation into account, the price of sponge was at an historic low.

In the 1990s the situation shows alarming signs of a repeat performance. In the last three years Timet, USA, thelargest US manufacturer is reported within the industry to have lost $170 million but is currently reporting anoperating income of $2.3 million in the third quarter of 1995 compared to an operating loss in the same quarter in1994. IMI, UK is reported to have costs of £63 million on sales of £60 million. Timet and IMI are toamalgamate which reduces the number of companies. The merger has given rise to a wry comment within thetitanium industry:- "they can make even larger losses as a single company than as two separate companies".Timet had been in the process of acquiring Cezus, France from Pechiney but that purchase is now in some doubtas IMI is a more attractive merger.

In other company moves Deutsche Titan may be merged with another company, possibly Titania SpA, Italy asboth are within the same group. Teledyne Wah Chang left the titanium market allegedly because of the cyclicalnature of the industry.

RMI, the second largest company in the US reported a small profit of $0.2 million for the third quarter of 1995which was the first operating profit reported since 1991, and followed losses of $125 million. Oremet, the thirdUS company made a further loss in the third quarter of 1995 despite moving into profit before the other two UScompanies and this follows losses of $14 million since 1991.

From 1990-1994 the titanium industry was depressed because of the downturn in the aerospace industry and theworld recession. The aerospace industry is now showing considerable improvement due partly to refits and partlyto the needs of the Boeing 777 following orders from Singapore Airlines and others. In 1989/90 the largedemands for commercially pure titanium for the aerospace industry drove the price up to $10-11 per pound; by1992 the price had slumped to $6-6.50 per pound with the slump in the aerospace industry. During 1995 theprice has increased by 35% and RMI reports that delivery times have lengthened from 6-8 weeks to 26-28 weeks.IMI Titanium, UK reports an increase in the lead time on forging billet from 18-20 weeks to 52 weeks. ThePresident of Timet has forecast that prices for 1996 will be 15% higher than in 1995. However, despite full orderbooks and long lead times the 3 US producers do not expect to show a profit before the end of 1996.

In 1995 there has been a 35% increase in production with most producers reported to be operating at 85%capacity. Most titanium producers introduced "temporary" surcharges of up to 20% in March 1995 to compensatefor increased alloying materials including vanadium, molybdenum, aluminium and nickel and these surchargesremain in force.

There is considerable uncertainty about the prices beyond 1996 and it would appear that US demand for millproducts has outstripped the supply of raw materials necessary for their manufacture. Even if FSU spongecontains it will not be cheap and this will lead to increases in the price for scrap.

Other industries, including the automotive industry, will not accept such wild price and supply variations; theirproduction lines require stable situations. If an upturn in the aerospace industry - always attractive to titaniumsuppliers because of its large profits - means large price increases other industries will stay away. When theaerospace industry shows a downturn the titanium industry looks to expand its applications but this requires timefor marketing and development. Plant is then de-commissioned (Table 1), capital investment delayed and the

10

industry is depressed until the next upward swing in the cycle; in the period 1990-4 depreciation exceededinvestment in the titanium industry.

However, this situation is not new. In 1979 the then-USSR was a larger supplier of unwrought titanium to Europeand the USA than Japan but withdrew from the market in 1980/81 to satisfy high domestic demand. This had aprofound effect on European smelters who were obliged to turn to Japanese suppliers - their competitors infinished products - who demanded long-term contracts at relatively high prices. The profits earned through thisperiod enabled the Japanese to invest in an expansion of capacity some of which has now been removed due tofalling prices. In the Russo-Japanese Trade Agreement for the period 1981-5 titanium sponge is specificallynominated as one of the buy-back items which the Japanese should import from the then-USSR. In the early- tomid-1980s the then-USSR was exporting about 1,000tpa each of titanium scrap and ferro titanium into Europe,mostly to West Germany and in 1984 it was estimated that some 2,600 tonnes of Russian ferro titanium would beexported.

A quotation from a 1984 report on the then-Soviet Union supply situation then is equally applicable today withthe FSU:

"[China and ] the USSR are essentially marginal sellers, not integrated into the Western markets, making salesopportunistically when it suits them and generally not on a long-term basis."

One of the long-term problems for the industry is assessing if this attitude has changed with the political changes.VSMPO are now quoted on the Russian stock exchange, have agreements with several companies in Europe andhave certification from several bodies including TUV in Germany. The other companies have not shown the samecommercial and market appreciation.

1.3 Standards

There are established standards for the industry. However, the major problem is not a lack of standards but thedetailed, individual specifications by the aerospace companies which limit production runs. Each aerospacecompany has its own specification which includes processing routes. Consequently a process route which isallowed by Rolls-Royce may not be allowed by Boeing. This results in small batch production. Over productioncan be stored but can only be used by a company which agrees the specification and the material is probablyover-qualified for industrial use having gone through the very detailed quality assurance requirements of theaerospace industry. Similarly the high proportion of material which results as scrap must be carefully separatedin order to provide the detailed pedigree which are required by the aerospace companies.

Standards applying to titanium come from the American Society for Testing and Materials (ASTM), BritishStandards Institution (BSI), Deutsche Institut fur Normalforschung (DIN), GOST for the FSU and the JapaneseInstitute of Standards. Although there is overlap between these standards they are not interchangeable. TheJapanese Titanium Society in its efforts to achieve a more global approach to titanium has made representationsfor a unified systems of specifications.

The Versailles project on Advanced Materials and Standards (VAMAS) was created by the Economic Summitof Heads of State at Versailles in 1982. VAMAS is concerned to promote a consistent measurement base foradvanced materials in the international market. VAMAS became self-sustaining in 1987 in a memorandum ofunderstanding signed by Canada, France, Germany, Italy, Japan, the UK, USA and the European Union. In1992 the project was extended for a further five years with a thematic structure which includes: metals andmetal matrix composites, polymers and polymer matrix composites, ceramics and ceramic matrix composites,test techniques and materials classification and data. Titanium was not included in the VAMAS project despiteits position as an advanced and a strategic material.

The Titanium Information Group in the UK issued a disk for the Titanium Conference, Birmingham, October1995 giving properties for titanium.

11

2 Titanium materials and their production

Titanium has been known as a common element for nearly 200 years and is the fourth most commonlyoccurring mineral. Titanium dioxide, also called titanium white, is a water insoluble powder used in whitepigments, plastics, ceramics and for de-lustering synthetic fibres. It is also used as a coating on weldingelectrodes. The use of titanium dioxide accounts for the largest quantities of titanium ore produced. Titaniumdioxide occurs in three allotropic forms, rutile, anatase and brookite with rutile being the most common formreadily available on Australian beaches. Titanium dioxide and its applications will not be covered in this report.

Although titanium is such a common element the pure metal is still expensive - the price in 1970 was $6.6 perkilo and in 1995 is between $4.75 and $10 per kg. Production per tonne requires more than twice as muchenergy as aluminium or some of the steels so that the metal has only been used where lightness, strength at hightemperatures or corrosion resistance justify the cost. The metal has high corrosion resistance to salt waterwhich makes it valuable for pipes in desalination plants, its corrosion resistance to other aggressive materialsmakes it valuable in the chemical processing industry..

2.1 Sources of titanium ore

Titanium minerals are currently mined from four quite dissimilar types of deposits. To a great extent, thestructure of the titanium industry reflects the mineralogy of the different deposit types and sub-types and worldtrade patterns for titanium products reflect deposit-type distribution.

Titanium metal and titanium dioxide pigment are the two main products made from titanium minerals and onthem large industries depend. The largest in terms of volume is the microcrystalline titanium dioxide for whitepigment. Because of its very high refractive index in its rutile form it is the chief opacifying pigment used inpaint and other products such as plastics and paper. It is used not only for white colour but for a range ofcolours and has supplanted lead-based pigments in many of these roles. Titanium dioxide pigment commonlyforms more than 20% by weight of some paints and the pigment industry consumes more than 90% of alltitanium minerals mined. Titanium dioxide for pigments is a consumer based industry and will not beconsidered in this report although it is worth some $4,200 million.

Titanium metal is the second ranking mineral by volume. The high strength-to-weight ratios, resistance tocorrosion and high temperatures make titanium and titanium alloys important ingredients in many industries ofwhich the most important is the aerospace industry. Titanium mining produced about 5.8 million tonnes oftitanium mineral concentrates worth approximately $1,000 million. The value of the raw products from thetitanium metal industries were worth about $800 million. The onward value of the components produced forindustry in titanium is difficult to assess.

Titanium is present in rocks as oxide and silicate minerals but only the oxide minerals have economic value; theeconomic geology of titanium is the geology of titanium oxide minerals. In addition, different titanium dioxideminerals are best suited for different industrial recovery processes. The market price of a titanium oxidemineral concentrate is a function of its titanium dioxide content and its suitability for a given process. Thismeans that mineralogy is a more important factor in the economic geology of titanium than it is for most othermineral commodities for which chemical enrichment is the most important factor.

The economic titanium oxide minerals are rutile, anatase and ilmenite. Rutile, with a theoretical composition ofpure titanium dioxide is the most valuable, currently with a price which varies between $550-650 per tonne forrutile bulk concentrate with a minimum of 95% titanium dioxide to $650-800 per tonne for rutile concentratedwith a minimum of 95% titanium dioxide and bagged. Ilmenite is another source of titanium products and iscurrently priced at Australian $100-110 per tonne, bulk concentrate with a minimum of 54% titanium dioxide.When the titanium dioxide content of altered ilmenite exceeds 70% it is commonly referred to as "leucoxene"and commands a premium price. In the ilmenite mining industry the term grade commonly refers to thetitanium dioxide content of ilmenite concentrates rather than to the amount of ilmenite in the ore.

12

In October 1995 bagged rutile ore varied between $550-800 per tonne depending on quality whilst ilmenite wasquoted at A$100-110 per tonne.

In Australia ilmenite is obtained as beach sand in South West Australia and as rutile along the coasts betweenSydney and Brisbane. In the USA, Malaysia, India and Sri Lanka ilmenite is produced from placer mines.American sand quarries are primarily located in the North Eastern states such as New Jersey. The largestknown titanium ore body is at Allard Lake, Quebec. In Norway and Finland ilmenite-magnetite is produced andFinland has a large mine at Otanmaki whilst Norway has one of the largest deposits in the world betweenEgersund and Flekkefjord. The large ore body at Smalands Taberg, Sweden has been mined only for its ironore. The large deposit in the Ilmen Range of the Urals in Russia is the origination of the name ilmenite.

With such a wide distribution of the minerals and in such quantities there is no foreseeable shortage of titaniumminerals for manufacture. Although Timet are concerned about supplies around the turn of the century there arelarge deposits in Brazil which have not been mined. Unlike chrome, there are large deposits in countries with astable political situation and thus the supply situation is again secure.

Table 3 World production of Ilmenite and Rutile (000s tons)

1970 1987 Reserves Identified ResourcesAustralia 1255 1250 27,000 131,000USA 787 360 10,600 103,000Canada 766 890 24,000 81,000South Africa 629 680 37,700 58,000Norway 579 550 29,000 89,000FSU ? 210 8,000 103,000Malaysia 192 240 unknown unknownSri Lanka82 80 4,300 5,000China unknown 80 28,500 38,000India 79 100 32,700 79,000Sierra Leone 44 110 1,800 2,000

Deposits are also found in New Zealand, Finland, Madagascar and the largest reserves appear to be in Brazil butexploitation of these is only just beginning. Figures for China may be an underestimate.

The manufacturing countries of UK and Japan have few titanium-mineral resources and the USA has to importboth the mineral and the metal for its needs despite having mineral deposits. All the manufacturing countriesplace titanium on their strategic materials list and in the USA titanium minerals are considered among the top tenstrategic mineral commodities partly because of its importance for the aerospace industry. Titanium was one ofthe materials considered sufficiently strategic to be chosen for study in the International Strategic MineralsInventory in 1988.

2.2 Methods of production

The manufacturing process for titanium products is as the following route:

Titanium sponge is pressed and titanium scrap added to form a consumable electrode from which ingot isformed by the vacuum arc reduction process (vacuum distillation process in the case of Timet). The ingot issent to the forging/slabbing or billeting mill. Slab continues to the plate mill for the production of hot rolledplate, or the hot strip mill for the production of hot rolled sheet or coil. In a further process material goes fromthe hot strip mill to the cold rolling mill for cold rolled sheet or to the welded tube mill for the production ofwelded tube.

Bloom or billet go either to the extrusion press for the production of seamless pipe and shapes; the rolling millfor bar; the forging press for bar, forged products or rings or through a ring mill for the production of rings.

13

2.2.1 IntroductionThere are relatively few differences between the different geographic areas producing titanium. The industry isdependent upon sponge production converting rutile into titanium sponge. The sponge is produced by the verylimited number of producers in Japan, FSU and USA. Sponge, together with other metallic additions is thenconverted via processes of blending, melting, forging and rolling into bar, billet, rod, wire, sheet, plate etc. intocommercially pure (CP) or alloy forms which are known as mill products. These products in turn are sold to thefabricators for the production of such items as titanium thick- or thin-walled tube. Major future markets areseen for large - up to 40 inches - thick-walled - up to 12-15 mm - tubes.

CP titanium mill products are made from titanium sponge plus titanium dioxide to increase the oxygen level toprovide the required strength. For higher strength material required by the aerospace and other industries,titanium sponge is mixed with other alloying metals including aluminium, vanadium, silicon, molybdenum, tinto a total percentage of up to 20%. The dominant alloy for aerospace applications is Ti-6Al-4V including alloyadditions of 6% aluminium and 4% vanadium added to the titanium sponge and known as 6:4 . This alloyaccounts for some 70% of aerospace applications and is a general workhorse of titanium alloys. Other alloysare produced to meet specific strength or temperature requirements.

All products start from ingot and are forged via intermediate conditioning stages to form billet, or via furtherrolling to form rod or smaller sections. Generally as the size of the mill product reduces, the longer theprocessing time required and thus the higher the cost. It is important to recognise that only 60-70% of an ingotis finally sold as mill product. The balance of the material is lost during intermediate stages or at the finalproduction stage. A combination of forging, machining and fabrication normally provides the route to allrequirements for engineering products.

Billet provides the material for manufacture of forgings, bar, wire and extruded or rolled/drawn seamless tubeand pipe. Slab provides the starting material for the production of plate, sheet and foil. Of the welded products,tube is produced from strip and pipe is made from plate.

Castings are produced either from remelted ingot or billet or from electrodes made from revert material. Castweldments enable large components exceeding the limits of individual casting weight to be supplied. Castingsallow very cost-effective manufacture of complex components in titanium although they are expensive. Thecost-weight ratio of a casting is usually higher than that of a simple forging unless the forging would requireconsiderable machining or the part must be made in several pieces which must be joined. The mechanicalproperties of cast titanium are very similar to wrought material which allows the use of castings in criticalstructural parts. Hot isostatic pressing (HIP) has been applied with great benefits as the high temperature andinert gas pressure produce an homogenised microstructure and internal gas and shrinkage voids are avoided.

A specialised form of titanium metal is powder which is made from sponge, fines or by atomisation of wroughtproduct. Some powder is made by hydriding sponge or scrap, further crushing and then dehydriding.

2.2.2 ProductionOne element in the high cost of titanium is undoubtedly the high energy cost in its production. The developmentby W.J. Kroll in 1940 of a method of reducing titanium tetrachloride with molten magnesium to produce acoke-like mass of titanium known as "sponge" marks the commercial beginnings of the material. Work in theUK was undertaken by ICI Ltd using a process in which the reduction of titanium tetrachloride was by sodiumrather than magnesium. Recent Japanese studies aimed at by-passing the complicated chlorination element ofthe Kroll process and its high energy cost have investigated an aluminothermic reduction of titanium oxide.This process was investigated before the Kroll process was developed but the reaction temperature was belowthe melting point of titanium and the metal was only produced for research purposes. The Japanese study wasbased on temperatures of 1078oC which is above the melting point of titanium and produces an aluminiumcontaining titanium over a broad composition including an intermetallic composition.

The chloride and sulphate processes are two recovery processes used in the titanium mineral industry. Thechloride process is the more recent of the two processing techniques and is preferred because it is lesspolluting. Its disadvantage is that it requires a high titanium dioxide feed (with certain trace elements) and in its

14

early days was only suitable for rutile and leucoxene with a titanium dioxide content greater than 70%. Thisprocess has now been improved to accept 60% titanium dioxide. Consequently plants using the chlorideprocess are supplied predominantly with concentrates from weathered shoreline placer deposits or by placerrutile deposits of fluvial origins. The other process in use is the Hunter process, developed by ICI, UK whichuses sodium to reduce the raw material into titanium sponge.

A high titanium dioxide content feed is not necessary for the sulphide process, indeed rutile and leucoxene areunreactive in it and the plants are fed with ilmenites containing 45-60% titanium dioxide. The sulphate processdigests titanium minerals in sulphuric acid before recrystallising as titanium dioxide. Effluents from this processare powerful pollutants unless they are neutralised.

Two sub-processes are used to convert a low titanium dioxide feed into a high titanium dioxide feed for the twomain recovery processes. First, in the smelting sub-process, low titanium dioxide feeds having a low calciumcontent but as little as 30% titanium dioxide are smelted to a high titanium dioxide slag plus pig iron. This slaghas a higher market price than ilmenite - about $275 per tonne for 80% titanium dioxide slag from Canada andabout $300 per tonne for 85% titanium dioxide slag from South Africa. Some of these slags are suitable for thechloride process or, if processed via sulphate, greatly reduce the volume of effluent.

In the second sub-process "synthetic rutile" is produced from ilmenite, generally with feeds containing about55% titanium dioxide. The price of both rutile and synthetic rutile is similar at around $600 per tonne.Synthetic rutile is used in the chloride process.

The most generally used process is the Kroll method where titanium is initially extracted from the basic ore -usually rutile - to convert to sponge in two distinct steps. The ore is mixed with coke or tar and charged in achlorinator. Heat is applied and chlorine gas is passed through the charge producing titanium tetrachloride andthe oxygen is removed as carbon monoxide and carbon dioxide. The resulting tetrachloride is a colourlessliquid and is purified by continuous fractional distillation before being reacted with magnesium under an inert,argon atmosphere. This results in a metallic titanium sponge and either magnesium or sodium chloride. Whenusing magnesium, the magnesium chloride is salvaged by recycling through electrolytic cells to recover bothchlorine and magnesium metal. When the reactor is cooled a wet mass remains and salt is removed from thesponge after crushing by vacuum distillation at temperatures up to 925oC or by leaching in dilute hydrochloricacid and drying.

The porous sponge is cold blended with alloying additions to ensure uniformity of composition, compacted intobriquettes and welded to form an electrode. The electrode is melted in a consumable vacuum arc furnace wherean arc is struck between the electrode and a water-cooled copper crucible. The molten titanium immediatelyadjacent to the crucible solidifies on contact with the cold wall forming a shell or skull to contain the moltenpool. The ingot is not poured but solidifies under vacuum in the melting furnace. Further purification,consolidation and homogenisation can be achieved by a further two or three vacuum melting cycles. Resultantingots are then fabricated to wrought product by hot or cold working.

In the Hunter process, the liquid sodium and titanium tetrachloride are melted simultaneously into an argon-filled reactor heated to about 650oC producing fine particles of titanium and sub-chlorides. The sub-chlorideand some sodium dissolve in the liquid phase, which also contains crystals of titanium and all the titaniumchlorides are reduced by raising the temperature to 950oC at the end of the process. New Metals Industries inJapan has developed a one-step reaction for the Hunter process.

Both the Kroll and Hunter processes have the disadvantage of being batch processes which limits productionand several companies have investigated continuous production processes. Dow Chemical Company, HowmetTurbine Components Corporation, Teledyne Wah Chang and Electrochimia Marco Ginatta have all developedalternative processes which offer production advantages - none of these companies is now in the titaniummanufacturing business.

The titanium sponge must be melted to produce titanium metal and nearly all commercial metal is produced bythe double arc melting process employing consumable electrodes in an inert atmosphere or vacuum. The power

15

required to produce one pound of titanium metal ingot is between 2-2.5 kilowatt hours. The sponge is oftencompacted with scrap metal and any alloying metals and the mixture is then heated in a copper crucible usingcurrent between 500-1000 A and producing a final ingot which may be as much as 40 inches in diameter.

A non-consumable electrode vacuum melting process is now being used in which the sponge is fed into amolten pool produced by an arc struck between the contents of the crucible and a rotating electrode. By thismethod higher temperatures can be achieved which increases the refining effect of the first melt.

Other developments are the use of the Axel Johnson electron beam cold hearth process followed by a singlevacuum arc remelt which gives good homogeneity of the alloy. Electron beam hearth melting can use a widevariety of scrap shapes as feedstock and as the molten metal in the hearth is not agitated the energy input to thefurnace can be carefully regulated giving cost savings and the ability to cast near net shapes.

The manufacturing process from ingot to final product is usually undertaken by hot forging to give blooms orslabs which may be converted into sheet, strip, plate, bar, billet, wire, foil and tubing mill products. Much of thecost of titanium results from the energy required in its production. Titanium has a high melting point thusrequiring high temperatures in its production and this combined with a strong affinity for oxygen requiresvacuum melting technology.

The fact that titanium metal production is essentially a batch process involving a multiplicity of productionsteps accounts for a considerable portion of the cost of the titanium ingot along with energy inputs. The cost perpound of one vacuum melting cycle for titanium correlates to the selling price per pound of a low carbon steel.Additionally the yield of the wrought product may be as low as 50% of the starting ingot adding a furthercumulative step in the high selling price for titanium wrought products.

The major division of titanium is into the two parts: commercially pure titanium and the titanium alloys.Commercially pure titanium - CP titanium is, in fact alloyed by the presence of small amounts of oxygentogether with nitrogen, carbon and iron. These elements, particularly oxygen, increase the hardness and tensilestrength and by varying the amounts added it is possible to produce a range of CP grades of titanium which arealpha in structure.

Titanium alloys result when titanium, which is normally an hexagonal (alpha) structure is transformed to abody-centred cubic (beta) structure when it is heated above 882oC. The addition of alloying elements totitanium influences the transformation temperature and many alloys result in the beta phase being retained atroom temperature. This produces a material containing both alpha and beta phases or even one which is whollybeta. The relative amounts of alpha and beta phases in any particular alloy have a significant effect on theproperties of the material in terms of tensile strength, ductility, creep properties, weldability and ease offormability.

One energy efficient method of heating titanium slab is by electromagnetic induction heating where slabs 12"thick x 78" long x 60" wide require an induction heating coil with a 5,000 kW rating giving 232kW hours pertonne. As the heater can be switched on and off, unlike conventional heaters, efficiency rates between 68% and76% can be achieved.

In melting titanium sponge the vacuum arc remelting (VAR) process is widely used and the electron beam (EB)melting process is now being put to practical use. By using a hearth in electron beam melting benefits such asgood homogeneity of the molten metal, removal of heavy inclusions and refining effect are achieved. However,plasma arc melting (PAM) in which the metal is melted under atmospheric pressure and refined by ultra hightemperatures and plasma gas has attracted keen attention. The US is already using large scale plasma hearthmelting facilities which produces less evaporation loss of alloying elements, enables comparatively easycomposition control and provides less restriction in material form.

Timet’s new sponge facility at Henderson, Nevada employs a vacuum distillation process which removes theresidues by applying heat to the sponge mass while maintaining vacuum in the chamber. The combination ofheat and vacuum boil magnesium and magnesium chloride from the reactor mass into the condensing vessel.

16

The titanium mass is then mechanically pushed out of the original reactor to be sheared and crushed whilst theresidual magnesium chloride is electrolytically separated and recycled.

One problem for the industry is that many of the companies have limited production processes downstreamfrom ingot production. Those companies which grew out of the steel industry e.g. Deutsche Titan had access tosteel strip production techniques. IMI, UK grew out of the copper industry giving good melting or furnacecapability but poor downstream technology in rolling producing only single sheet rolling. Japanese companies,many of which grew out of the steel industry e.g. Kobe Steel, have automated rolling techniques. Timet, UShave strip rolling and this may be a useful element in the merger with IMI. The downstream techniquesdeveloped for the steel industry are applicable in the titanium industry reducing costs and improving qualitycontrol.

Only a small proportion of titanium output is processed on efficient, high-volume mill equipment of the typeused in the modern steel industry and these are mostly coil and welded tubing where volume markets haveencouraged process development. The cold hearth melting process developed in the US and used by AxelJohnson Metals Inc. for the production of large slabs was the first step in continuous casting processesproducing mill products that can feed directly into a high speed mill for further processing and producingeconomies of scale.

RMI Titanium has recently produced large diameter seamless alloy pipe, which they see as the material of thefuture, using the steel processing facilities of the US Steel/Kobe Steel plant in Ohio. Despite beingdemonstrated many years previously in the US the market opportunities were not developed to take advantageof the low cost process. In addition, RMI has developed a roll-clad process based on titanium roll clad steelplate which will reduce the cost of material for the chemical industry. In the process, lower cost titanium alloysare roll bonded to higher cost backing material in titanium or zirconium alloys.

Titanium is a difficult material to shape and conventional methods such as forging are time consuming andwasteful of the raw materials with up to 80% of material from forged parts for the aerospace industry becomingturnings or other scrap. Titanium machines at between 10-20 times slower than aluminium and can account for70-80% of the cost of the component. In work undertaken in the late 1980s it was estimated an average cost of$750 per part for components machined from titanium alloy; this compared with $230 for investment casting.

An alternative method is die casting although the cost of the dies for complex parts can be prohibitive. Themajor problems with casting are preventing the molten titanium alloy becoming contaminated during casting,the development of mould materials which are not eroded by titanium and the removal of voids which form oncooling. Castings offer good static strength and fracture toughness and reduce the amount of machining whichis necessary with forgings. Oremet in the US produces titanium castings for industrial and marine applications- pumps and valves - using the sand casting technique. The material used for "sand" casting is actually rammedgraphite much of which is then chemically milled to remove the surface reaction layer and then hot isostaticallypressed to remove voids.

High levels of waste are traditional with titanium giving rise to the phrase that only a quarter of the titanium inthe aerospace industry actually flies. As a further and recent example - with the material for a golf club headoriginally weighing 1.5 pounds, 1 pound will be lost in processing. However, titanium investment castings arefinding increasing applications in aerospace where they are replacing forged or machined parts. Hot isostaticpressing is said to make castings comparable with forgings in quality and 40% cheaper and would result in lesswaste. Near net shape techniques have been under investigation for some 10 years but have not reached thewidespread use which was anticipated. It should be noted that much of the scrap material is recycled and majorchanges in production could have an impact on this aspect of the business.

2.2.3 Manufacturing methodsThere are a number of techniques for mechanically bonding titanium to a lower cost backing material e.g.carbon steel so lowering the overall cost of the product. In explosive bonding titanium sheet is placed on top of

17

the backing sheet but with a gap between materials. Explosive is spread uniformly on top of the titanium sheetand detonated from a single point. This drives the titanium sheet down and across the air gap on to the backingstreet giving an uncontaminated metallurgical bond with a guaranteed shear strength. Titanium can also beresistance bonded to an inexpensive steel backing material with a patented process known as Resista CladTM.This method has achieved wide use in producing corrosion resistant linings used in chemical plant and flue gasdesulphurization ductwork and flues.

An overlap method uses Resista CladTM methods with conventional techniques. The plant is built from theunclad steel in the normal way with weldable primer sufficient to avoid corrosion of the steel duringfabrication. On completion the lining is made with overlapping alloy on Resista CladTM plate. The steel iswelded to the steel of the absorber and the joints between the overlapping alloy sheets are sealed by filletwelding.

A method known as batten strip used in plant built from pre-lined sections of steel with the titanium linerstopping 5 cm from the steel plate edges and the steel welds made without harming the liner. A batten strip thencovers the exposed steel and overlaps the liner with a fillet weld sealing the joint.

For large areas needing only a thin layer of titanium to prevent corrosion roll bond linings are used.Commercially pure titanium can be bonded to a base plate by passing repeatedly through a powerful plate millat high temperature. This causes the adjacent cleaned plate surfaces to bond in formation of an intermetalliclayer. Individual plates can be made by welding the base plates together and using the strips to fillet weld andseal the titanium surface. Roll bonded plates are limited to low pressure service but are low cost alternatives forthe protection of large diameter pipes, ducts and vessels.

Anodising can be used to increase the thickness of the oxide surface layers to reduce galling. Where acomponent is not subject to continual wear which would cause layers to be removed, anodising provides simplelow, cost effective treatment. The deposition of low frictional coefficient polymers simultaneously with thegrowth of the anodic film provides both surface hardness and optimum corrosion resistance and lubricity.Several proprietary electrochemical processes are available which also provide low friction polymeric surfaces.

Very precise and intricate milling of titanium can be achieved by the controlled selective acid attack of thesurface, a process known as chemical milling. The titanium component is placed in a solution of 12-20% nitricacid and 4-5% hydrofluoric acid with a wetting agent and the temperature maintained at between 30-40oC. At36oC metal is removed at a rate of 0.02 mm/minute. Areas not to be removed are masked with either neopreneelastomer or isobutylene-isoprene co-polymer.

2.3 Titanium alloys

The major titanium alloy which is the workhorse of the industry is the titanium-aluminium-vanadium alloy Ti-6Al-4V which is priced at a factor of 1.5 or 2 over commercially pure titanium. The relatively small size of thetitanium industry and the considerable use of alloying metals can leave the industry vulnerable to pricechanges. Increases in the price of vanadium in 1995 have resulted in price increases for the standard titaniumalloy Ti-6Al-4V.

Commercially pure titanium, grades 1, 2, 3 and 4 is available in bar and billet and the following alloys oftitanium also commonly available in bar and billet form:- Ti-6Al-4V (grades 5 and 24), Ti-5Al-2.5Sn (grade 6),Ti-0.2Pd (grades 7 and 11), Ti-3Al-8V-6Cr-4Zr-4Mo (also known as BETA-C), Ti-6Al-2Sn-4Zr-2Mo, Ti-8Al-1Mo-1V, Ti-6Al-6V-2Sn, Ti-10V-2Fe-3Al (TIMETAL 10.2.3), Ti-4Al-4Mo-2Sn (IMI 550), Ti-4Al-4Mo-4Sn-0.5Si-0.1C (IMI 551), Ti-15Mo (IMI 205) and TIMETAL 100.

Alloys available in casting form include Commercially Pure grades 2,3,4, Ti-6Al-4V (grades 5 and 24), Ti-0.2Pd (grade 7), Ti-5Al-2.5Sn (grade 6), Ti-15V-3Cr-3Sn-3Al (TIMETAL 15.3), TIMETAL 1100 and Ti-5.8Al-4Sn-3.5Zr-0.7Nb (IMI 834)

18

Titanium alloys can be divided into three main groups:- corrosion resistant, high strength and hightemperature.

The main corrosion resistant alloys are, Commercially Pure grades 1,2,3,4, Ti-Pd (grade 7 and 16), Ti-3Al-2.5V (grade 9 and 18), Ti-Pd (grade 11 and 17), Ti-0.3Mo-0.8Ni (grade 12), BETA C (grade 19 and 20).

High strength alloys are Ti-6Al-4V (grade 5), Ti-5Al-2.5Sn (grade 6), Ti-6Al-6V-2Sn, Ti-10V-2Fe-3Al, Ti-15V-3Cr-3Sn-3Al, Ti-5Al-2Sn-4Mo-2Zr-4Cr, Ti-4Al-4Mo-2Sn (Ti550), Ti-8Al-1Mo-1V.

High temperature alloys are Ti-6Al-2Sn-4Zr-2Mo, Ti-6Al-2Sn-4Zr-6Mo, Ti-11Sn-5Zr-2.5Al-1Mo-0.2Si (IMI679), Ti-6Al-5Zr-0.5Mo-Si (IMI685), Ti-5.5Al-3.5Sn-3Zr-1Nb (IMI829), Ti-5.8Al-4Sn-3.5Zr-0.7Nb(IMI834), TIMETAL 1100 and the titanium alumnides.

Ti-6Al-4V is the most widely used of the titanium alloys as it can be heat-treated to different strength levels, isreadily weldable and is relatively easy to machine. The many uses of Ti-6Al-4V include blades and discs foraircraft turbines and compressors, rocket motor cases, marine components, steam turbine blades, structuralforgings and fasteners. To enhance durability a range of thermal, mechanical, chemical and other treatmentshave been developed to modify the surface characteristics and a considerable body of data on its use andproperties is available.

Titanium alloys are available in alpha, alpha-beta and beta forms. Alpha alloys are non-heat treatable and are,generally, very weldable. The alloys have low to medium strength, good notch toughness, reasonably goodductility and have excellent mechanical properties at cryogenic temperatures. The more highly alloyed alpha ornear alpha alloys offer good high temperature creep strength and oxidation resistance.

Alpha-beta alloys are heat treatable and most are weldable and have medium to high strength levels. The hotforming qualities are good but the high temperature creep strength is not as good as most alpha alloys.

Beta, or near-beta alloys are readily heat treatable and are generally weldable with high strength and good creepresistance to intermediate temperatures. Beta-type alloys have a good combination of properties in sheet, heavysections fasteners and other applications.

2.4 Composite materials

Powder metallurgical techniques have been used for the manufacture of a new class of low cost, highperformance titanium matrix composites known as CermeTi has been developed by Dynamet Technology,USA. The process is being developed as an economic method for fabricating fully dense titanium alloycomponents to a near-net shape. Titanium carbide is the most successful particulate addition to date Theprocess consists of blending elemental- and master-alloy powders, cold isostatic pressing to a preform shape,vacuum sintering to a closed porosity followed by hot isostatic pressing. Low cost reusable polymer toolingreduces the cost of the process. The composite material is intended for use in the automotive and biomedicalindustries and is currently being used in high performance sporting goods.

A casting process developed at Metal Matrix Composites in a project funded by the Ballistic Missile DefenseOrganization’s Small Business Innovation Research grant is producing MMCs 25 times faster than currenttechnology and dramatically lowering costs. The process is a pressure infiltration casting process giving lowcost parts of superior quality with excellent control of the direction of solidification and defect-free castings.The method will increase stiffness or improve the thermophysical properties of components with little increasein costs. It can also be used to produce wet and dry friction, bearing and lubricity materials.

The US Navy has successfully used centrifugal casting of MMCs to form tubes and other symmetrical shapes.The centrifugal casting process uses pre-cast billets or bars of a chosen reinforcement for matrix materials. Thebillets are re-melted and introduced into a spinning mould of the matrix metal. The Navy used centrifugalcasting to create an MMC drum for the Underwater Repair Fleet. A titanium carbide/bronze composite wasplaced inside a drum for abrasion resistance and survived the Navy’s required service life test.

19

There has also been work on improvements in production for silicon carbide fibre reinforcement of titanium forMMCs with the original work based on requirements for the National Aerospace Plane (NASP) or advancedgas turbine engine concepts. The aim is to develop composites which will withstand high mechanical andthermal stresses. A major problem in the manufacture of silicon carbide reinforced titanium is avoiding theformation of a damaging fibre-matrix reaction zone during consolidation as the high reactivity between thematrix and fibres leads to the formation of brittle reaction products.

Aerospace Metal Composites has been developed from the metal composites company established by BritishPetroleum but sold in 1993 when BP withdrew from the advanced materials business. The remaining companywas subject to a management buy-out and has continued the work on metal matrix composites for the UKDefence Research Agency, Farnborough. AMC’s main products are based on silicon carbide reinforcedaluminium produced by powder metallurgy but the company has been working on titanium particulate MMCand mechanically alloyed magnesium and titanium.

Metal matrix composites could be used in the compressor area of aircraft turbines. Rolls-Royce is investigatingthe use of silicon carbide reinforced titanium - SiC/Ti 6-2-4-2 - for the low and intermediate pressure discswhich would reduce their weight by more than 40%. Other potential applications are in the shafts, fan blades,struts and castings but considerable research is needed before a commercial component is introduced into anaircraft engine.

2.5 Intermetallic materials

Titanium alumnides are attractive structural materials for the aerospace industry due to their low density, highspecific strength and modulus retention and excellent creep resistance. They have been substituted for nickelalloys in the turbines of military aircraft. There are two major forms - a2 and gamma-based titanium alumnidesalthough interest is fading in the a2 alloys for many applications. Two alumnides which are available in bar andbillet form are Alpha-Two aluminide 24/11 and Alpha-Two aluminide 25/10/3/1 .

However, a serious handicap in using these intermetallics is their generally low ambient temperature ductility.Various alternatives to solving this problem have included refinement of grain size, addition of ternary,quaternary alloying elements and innovative heat treatments. Significant gains have been made by the additionof alloying elements particularly niobium. Mechanical alloying was developed during the 1960s and has beenused to produce several commercial nickel- and iron-base oxide-dispersion strengthened alloys which havebeen the subject of research under the EC BRITE programme. The processes are now being investigated for usewith titanium although contamination problems have been found from the milling balls.

A further problem is the matter of secondary manufacturing including machining and joining and the materialsare not easy to weld requiring very close control of the welding parameters. There is a need for more ductilealloys as it is believed that low ductility combined with high residual welding stresses and rapid cooling ratesare the main causes of cracking in the welds. Both alloys are also susceptible to hydrogen embrittlement duringthe welding process. A major problem is the lack of data on the performance of welded joints, particularly athigh temperatures.

However, a conference in February 1995 on gamma titanium alumnides reported that there had been significantefforts in a multi-step conversion process on large (greater than 220 kg) ingots and such secondary processingas rolling and superplastic forming was advancing reasonably well. One study reported that the grindability ofgamma titanium alumnides is better than that for Inconel superalloys or titanium alloys. Databases of materialproperties are now being established and most of the properties measured up to 760oC appear to be comparableor better than their counterpart nickel-based superalloys.

There are engine programmes involving the alumnides at General Electric, Pratt & Whitney, Rolls-Royce,MTU and Volvo. Not surprisingly these studies concluded that the remaining hurdle is the development of alow-cost, high-volume manufacturing method.

20

Intermetallic compounds of titanium which could be affordable have also been investigated by civil aircraftbuilders for their weight saving abilities. Titanium aluminide with some 50% aluminium has advantages inbeing about 25% lighter than titanium and able to withstand temperatures up to about 800oC which would allowit to be used in the hotter region of the compressor and for turbine blades.

The titanium alumnides are still generally in the research stage. Crucible Materials Corporation, US which hasbeen involved in their research and manufacture over a number of years produce about 2,000 lbs of titaniumpowder with a similar amount of other powders including Ti-6Al-4V. The price for such powders if ordered inquantity would be $25 per lb for -35 mesh Ti-6Al-4V powders if ordered in large quantities of 20,000 lb lots;such quantities are never ordered and so the economies of sale are not realised and for orders in lots of 100lbsthe price would be $110 per lb. Finer powers e.g. -325 mesh would cost about $750 per lb with little allowancefor large quantities. Crucible left the titanium sheet production market in about 1989/90 reportedly due to thecyclical nature of the industry.

2.6 Coatings

High performance coatings are becoming an increasingly important factor in the production of engineeringtools and components. This results from the more demanding applications, the automation of production, a needto contain the cost of tools and components, advances in deposition techniques and new environmentallegislation. One problem area which require further effort is delamination in which the coating is peeled fromthe substrate.

Coatings are used to provide protection against mechanical wear and corrosion in extreme operatingenvironment. They can provide a more economic alternative to fabricating components entirely out of thecoating material by providing a combination of properties of both the substrate and the coating. The cost ofthese coatings is increasing as tools and components need to be harder, last longer and perform better. As anexample although coatings on cutting tools reduce the coefficient of friction at all operating speeds thedifference is greatest at higher speeds.

Thin coatings are deposited on the target material by various processes although these can be divided into twomain areas - thermal spraying and vapour deposition. Chemical vapour deposition (CVD) has been widely usedin the protective coating of tools and components. The process was originally restricted to use on substratesable to withstand high operating temperatures (400oC to 1000oC) although a new process - Plasma EnhancedCVD (PECVD) - has brought the operating temperatures down to 400oC for titanium nitride. The requirementfor an improved deposition system was also enforced as the original CVD process produced hazardous by-products.

Physical vapour deposition (PVD) technology is used for the deposition of titanium nitride and its variantsalthough it can be used for a wide variety of thin coatings. PVD, or ion sputtering, is a dry process developedoriginally to improve CVD and allows for high deposition rates at temperatures of no more than 400oC thusavoiding the need to re-harden the substrate.

The next generation of high performance coatings are expected to be based on three main types: multi-layer,diamond-like carbon and complex alloy carbides and nitrides rather than titanium.

21

3 Environmental impact

3.1 Emission problems during production

In the production of titanium, toxic and hazardous materials are handled including chlorine and these areregulated in the US under the Comprehensive Environment Response, Compensation and Liability Act. Withthe Kroll manufacturing process - using chloride - the chlorine is recovered as is the magnesium. In the Hunterprocess, using sulphate, more concerns are found due to the production of sulphuric acid but this is a minorityprocess. Timet note that capital expenditure for environmental protection and compliance was $1.2 million in1992, $1.5 million in 1993, less than $1 million in 1994 and they have budgeted $1 million for 1995.

Waste from the production of titanium dioxide industry has caused many more problems and under the ParisCommission of 1980 it was agreed that contracting parties should report annually on discharges of waste fromthe titanium dioxide industry with a view to eliminating pollution.

3.2 Life Cycle Assessment

The main disadvantage of titanium in life cycle assessment is the high energy input required for its manufactureand which is covered in Chapter 2 but against this must be balanced the following considerable benefits:

Reduction in operating cost titanium offer the potential for conservation of energy in engines and othermobile equipment where weight saving translates into better fuel economy

Improved heat transfer the efficient, sustained heat transfer provided by titanium improves energyconservation and reduces process cycle time

Corrosion resistance the use of titanium in the petrochemical industry, for example, allows lessexpensive crude oil to be processed even though it contains higher levels ofhydrogen sulphide

Environmental protection the reduced risk of leakage through corrosion and pollution of fluids andcooling water

Improved safety damage tolerance and fire resistance play an important role in raising plantoperation and safety standards

Life cycle assessment for titanium is excellent as indicated by the willingness of some suppliers to give 100year guarantees for buildings which have been clad or roofed in titanium.

Studies in the 1980s indicated that where titanium was used for the electrodes in chlorine applications therewere energy savings of between 500-1,400kWh per metric ton of sodium chlorate when compared to the use ofconventional graphite electrodes. At a then-world production of 1 million tons each year there were energysavings of $50 million each year.

A further example is the use of titanium coated anodes for metal electrolysis means that metals such as copper,nickel and zinc can be extracted from their sulphide ores without causing environmental pollution throughsulphur dioxide emission, dust and fumes. Low-value ores may be acid-leached or pressure acid leached withcommon mineral acids without corroding titanium although care must be taken to avoid high pressure oxygenwhich can cause ignition.

At a conference in Gdansk, Poland in June 1995 a life cycle comparison was made for lining FGD plant withtitanium versus other materials. As an example an organic lining in a chimney was completed in 2.5 monthswhilst the lining of one of the flues at the Drax power station in the UK was completed in 19 days. The loss ofpower output capacity is the most serious cost to the operator and the shutdown time for the lining must be keptto a minimum. On a life-cycle basis it is normal to anticipate 20 years life from a titanium lining.

22

3.3 Recycling

The titanium industry is unusual in that recycling is firmly in place and is, indeed, an important element in theeconomic and production processes. The phrase "only a quarter of the titanium in the aerospace industryactually flies" refers to the heavy wastage in the machining of titanium parts. Consequently much of the metalgets recycled as scrap. Wider introduction of near net shape techniques for forming and other optimisedmethods would reduce the amount of scrap produced but these techniques have not grown as expected.

Traditionally ingot producers used 45% scrap in production but this can go as high as 65%. In 1994, scrapsupplied 53% of ingot feedstock in the US. One factor in the use of scrap is that the scrap dealers must producea pedigree for their material; with the traditional high-quality turnings from the US aerospace industry this wasa relatively easy task. The current price for scrap has doubled in the past year to between $1.20-1.30 per pound;bulk weldable scrap has increased by more than 33% to more than $3 per pound. Some material suitable for usein non-rotating parts has come from the FSU at $2.50-$3 per pound but the Japanese have been hampered bythe strong Yen and have not been exporting scrap.

Keywell Ltd in the UK, a major dealer in titanium scrap estimate that their sales are between 850-900tpa with aprice of £2,500-3,000 per tonne which is an increase on 1994. Keywell note that demand is slightly greater than5 years ago and there is less Russian scrap available; 70% of their scrap goes to the aerospace industry with theremaining 30% into ferro-titanium.. There are about 7 dealers of their size in Europe.

Due to the closure of sponge production plants in Europe, FSU, Japan and the USA there is a ready market fortitanium scrap for re-use. However, the downturn in military construction means that there are less turnings andthe market has shrunk. The main source of secondary material for titanium metal production continues to berevert scrap and production scrap such as turnings.

Much of the titanium used by industry is recycled and there were considerable fears that the closure of manySoviet defence installations would result in an imbalance in the industry due to a massive influx of scrap metal.This was noted as causing problems in the titanium scrap business in 1993/4 with a considerable drop in pricealthough it was difficult to separate the contribution from weak titanium markets and FSU supplies. London andScandinavian Metallurgical Company which is the largest producer of ferro-titanium in Europe and therefore amajor consumer of titanium scrap estimated that between 1990 and 1992 FSU scrap imports to the UK rosefrom 1,400tpa to 3,500tpa. The USA previously exported some 5,000tpa of turnings to the UK but this has nowreduced to 2,500tpa. The LSM sourced 59% of its scrap from the USA in 1990 but only 19% in 1992; thecorresponding figures for the FSU showed a rise from 13% to 55%

The market for FSU scrap has now slowed and much of the good quality material is exported to the USA wereit can be used for the manufacture of titanium rather than ferro-titanium. However, with the collapse of theRussian defence industry titanium primary production has fallen from 120,000tpa prior to 1989 to a currentfigure of between 10-15,000tpa which leaves less scrap for export. Originally factory managers in the FSUwere unsophisticated in their approach to the world titanium markets but this is now a matter of history.

Considerable amounts of titanium scrap are used in the production of ferro-titanium, an alloy most commonlyused in steel production. World demand for ferro-titanium is currently running at 27,000tpa and in early 1995 itwas estimated that the FSU ferro-titanium exports would account for between 25-30% of the supply to theWestern world in 1995. Following that prediction there have been some chaotic movements with price risesfrom $1.30 per unit to $2.40 per unit in the first quarter of 1995. This was followed by an unexpected slidewhich began in mid-April and reached a low of $1.75 in October. It was originally thought that the main FSUsuppliers would decrease the supply which, in fact, happened but the discrepancy was made up by secondaryFSU suppliers. The breakdown in central control in FSU has lead to considerable economic rivalry betweencompanies and between the former states of the old Soviet Union.

The US consumption of titanium scrap, ferro-titanium and other additives in the manufacture of steel and otheralloys showed a slight rise in 1994 over 1993 with 6,090 tonnes from 5,940 tonnes. The greatest use was in theproduction of carbon steel (2,390 tonnes) followed by stainless and heat resisting steels (1,930 tonnes) and

23

superalloys (609 tonnes). Estimated use of titanium in scrap and ferro-titanium made from scrap by the steelindustry in 1995 was 4,600 tonnes; by the superalloy industry, 500 tonnes; in other alloying uses 450 tonnesand by miscellaneous other uses, 360 tonnes. Old scrap reclaimed was between 200-400 tonnes. In December1995 Korea was aiming to purchase 250 tonnes of the TGTV grade titanium sponge used in steel production.Increased consumption was seen by the steel industry with growth of some 15% between June and December1995 although with consumption stable it was thought by the industry that this was being stockpiled.

European production is dominated by the UK and specifically by LSM which has an annual output of 5,000tonnes. Other producers around the world include Japan producing 2,500 tonnes (down from 2,750 in 1993),the USA with 5,750 tonnes and FSU which may have capacity (not production) of 20,000. Traditionally theprice for ferro-titanium has been quoted as the price of the scrap plus a little more than $1 per pound andRussian prices of between 90 US cents and $1 per pound for scrap have driven down the market. The pricequoted for 70% ferro-titanium in October 1995 was $3.5 per kg. The flow into Europe has lessened as theRussian originators have concentrated on the US market.

Much of the scrap from the FSU has been primary metal although the initial low cost was offset by therequirements to cut the pieces into manageable chunks for furnaces which is an expensive operation. The scrapmarket has also been affected as the FSU has been responsible for a large amount of titanium sponge,sometimes with variable quality and sometimes with dubious antecedents. There are metallurgical limits to theamount of FSU scrap which can be used as much contains alloys in the wrong proportions for use in aerospacegrade material. However, as that industry has been in depression there has not been the consequent demand forhigh quality titanium alloys. However, if the predicted growth in industrial and commercial applications fortitanium occurs there will be increased demand for non-aerospace quality material.

In June 1995 Titanium Hearth technologies, Exton, Penn acquired the titanium recycling facility of VikingMetallurgical, Nevada. The facility can melt more than 1,360tpa of titanium. The acquisition of the facility willgive Titanium Hearth Technologies recycling and refining capacity of 91,000tpa.

24

4 Social impact

4.1 Employment

The firms in the titanium industry are characterised by their small size. Timet is the largest of the Westernproducers and had 860 staff on 31 December 1994 which is a decrease from the 1,050 at the same date in 1993;that number will have shown a further decrease by December 1995. Oregon Metallurgical Corporation(Oremet) which is the third largest titanium company in the US has 400 staff and many of the fabricators haveless than 40 workers. Titanium Industries Inc. which was one of the founders of the International TitaniumAssociation and is a major company in the industrial applications of titanium employs 125 staff in 8 plantsincluding Titanium International Ltd in the UK. Titanium manufacture may also be a small department within alarger company as with London and Scandinavian Metals and Inco Alloys. Many of the companies have thehigh skill levels needed for work with the aerospace and defence industries and the quality of the IMI researchdepartment is noted as a desirable factor in the current merger with Timet.

Facilities in the FSU have much larger numbers of workers resulting from the full employment policies of theprevious administration. The Paton Institute in the Ukraine has a large section devoted solely to the welding oftitanium. VSMPO has much larger staff numbers than would be considered commercially efficient by Westerncompanies. The staff at such large plants as Berezniki Titanium-Magnesium Integrated Works in the Ukraineare noted as being demoralised and have not been paid for some time.

The industry in the US has been plagued with industrial problems in recent years. Timet has had a 9 monthstrike at its sponge operation in Henderson, Nevada and a 3 month strike at its rolling and finishing operation atToronto, Ohio which ended in October 1994. 400 workers at RMI walked out at the beginning of October 1995after the failure to ratify a labour agreement reached a few days earlier. There has been a freeze on pay duringthe 1990s slump which has left companies uncompetitive with other industries.

4.2 Skill base and training

The National Institute of Standards and Technology of the US Department of Commerce is co-operating withthe International Trade Administration’s Special American Business Internship Training Program to develop a$1.3 million comprehensive standards training program in Russia and the other East European states. Thetraining program will aid qualified engineers. administrators and technical and regulatory experts to familiarisethemselves with US government and private sector procedures. The aim is to encourage better qualityassurance and standards and conformity assessment thus assisting them to produce better-quality goods. Theinitiative will allow 100 experts from these countries to receive 2 months training with US methods ofstandardisation. The experts are from key industrial sectors including automotive, medical equipment,telecommunications and aerospace.

The approach to education in the US is felt to be based on development of skill levels rather than the artisanapproach still found in some areas and which operated over longer time frames than were now acceptable inmodern production methods. If the Japanese have a development cycle of 12-24 months it was not acceptablefor the US to have 60-72 month development cycles. There should also be a variety of skills and these mustinclude some economic background as this was felt to give an improved approach to cost justification. It wasfelt that firms which use high technology pay higher wages and make more profits. Such companies had aflexible outlook with high quality assurance concerns.

Industrial training has also been undertaken by several of the titanium manufacturers and suppliers. VSELEngineering in the UK note the help that they have received with training from IMI and Bunting Titanium hastrained welders to ASME standards for offshore work in North America.

The titanium industry holds major international conferences of which the most recent was the 8th WorldConference on Titanium, held in Birmingham, UK in October 1995 sponsored by the UK Institute of Materialsand attended by 636 people. The next conference in the series will be held in St Petersburg in May 1999 andwill be chaired by Professor I.V. Gorynin of the Academy of Sciences.

25

Concern at the low levels of commercial and technical information by potential end users of titanium, theTitanium Information Group in the UK has jointly developed an excellent computer disk with the UKEngineering Information Company Ltd on Titanium and its Alloys covering uses and applications. The disk isfree of charge and has received widespread circulation including, amongst other distribution, to delegatesattending the Birmingham conference. TIG have also produced information booklets on other aspects oftitanium including one on forging and a handbook on alloy microstructures. The Titanium Technology Forum,Norway has prepared a Titanium Buyers Guide for the Birmingham conference listing companies and societiesinvolved in the production and manufacture of titanium.

A further information medium has been the journal Titanium World, previously Titanium Europe, which ispublished in English by the Dutch publisher KCI Publishing BV.

4.3 Technology transfer

Much spending on American research was funded by the US Department of Defense for military applications.The ending of the Cold War and the "Peace Dividend" led to a cut in this funding of some 50%. Manyadvanced materials companies relied for 90% of their turnover on defence spending either through sales orthrough R&D grants. The US has therefore invested in technology transfer programmes for those companieswhich were so heavily dependent on the defence industries. The other Western countries with such reliance ondefence spending are the UK and France which have not introduced such a range of projects. The FormerSoviet Union, which had probably the highest reliance on defence spending has not introduced technologytransfer measures and in the titanium industry this has caused problems as factories disposed of material andequipment on the raw material market in an undisciplined way.

The US programme, however, has been altered by the shift in power in the US Congress which has led to adifferent approach in defining spending cuts and reducing the budget deficit. Current thinking on technologytransfer and on the balance between applied and basic R&D is now a matter for political discussion. TheRepublican Party in the US has a majority in Congress and aims to change the approach away from governmentintervention.

In a recent interview (June 1995) the current head of the House Committee on Science, R. S. Walker indicatedthat some research funds may be cut. Such programmes as the Advanced Technology Program within the USDepartment of Commerce are felt to have demonstrated some value but are considered to be anti-competitivebecause it subsidises the commercial development of a relatively small number of federally chosentechnologies. In April 1995 $90 million was removed from the ATP reducing the funding from $431 to $341millions.

Other programmes which may be terminated are the Technology Reinvestment Program at the Department ofDefense and the Cooperative Research and Development Agreement (CRADA) program at the Department ofCommerce. However, the Advanced Materials Partnership programme sponsored by the Advanced ResearchProjects Agency has been maintained, so far. The advanced, technical ceramics industry also relied onDepartment of Defense funding and the US Department of Energy has established the Continuous FiberCeramic Composites programme for the development of ceramic composites for industrial applications.Companies such as Textron Speciality Materials have benefited from these grants.

Another programme which has been welcomed by industry and has survived is the Small Business InnovationResearch programme from the Department of Defense, the Department of Energy and the National Institutes ofHealth. This programme aims to supply small companies - under 500 employees - with relatively small sums ofmoney and with the minimum of administrative burden. The intention is to remove funding from the establishedcompany sector and promote small business which is felt to be innovative. Recent announcements for fundinghave shown grants which average $75,000 and cover a period of six months. A selection of the projects whichhave been awarded these grants includes:

• Niobium-titanide tin/copper multi-filamentary superconducting wire with niobium/titanium compositefilaments (Supercon Inc.)

26

• Improvement in the characteristics of ternary niobium titanium tantalum alloys (IGC AdvancedSuperconductors)

• A feasibility study to correlate vanadium (chromium, titanium) alloy weld strength with weld chemistry(Charles Evans & Associates)

• High temperature brazing of silicon carbide (Busek Company)

• Ductile joining of beryllium to copper (Surmet Corporation)

Under the new approach, government involvement in applied research is felt to increase the potential for pricesupport requirements, trade protection and company bail-outs and is thus felt to be against the overall nationalinterest. In future, government funding would be targeted at basic rather than applied research. In line with thisthinking the National Science Foundation has had an increase of 3% in its funding for the financial year 1996.

The matter is very controversial in the US and the scientific, technical and industrial communities have ralliedto the support of the programmes. Examples are given of the returns on investment returns for suchprogrammes. The Manufacturing Extension Partnership centres report benefits of $7 for each Federal dollarreceived. In 1994 each individual technical assistance project produced in a year, $191,000 in increased sales,$24,000 savings in labour and materials costs and created or preserved 5 jobs.

In the UK, funds from the EU Konver programme of £84 million have been allocated to areas affected by thecuts in defence spending. The money is to encourage the creation of new businesses which would cushion theloss of military-based jobs and is intended for small and medium sized companies to help with innovation andtraining programmes. Projects covering environmental improvement, rehabilitation of military sites and tourismare also eligible for support but no specific mention has been made of advanced materials

In 1991 the Japan Titanium Society and the US International Titanium Association formed the InternationalTask Force which was joined in 1994 by the FSU Titanium Association. The aim of the Task Force is todevelop industrial applications for titanium looking beyond national borders and cultivating new markets.

4.4 R&D investment

An interesting project which brings together the titanium supply industry, oil industry, engineering industrywith research organisations and a health and safety body is the Titanium Risers and Flowlines project co-ordinated through Norwegian organisations.

Offshore oil and gas fields are descending to ever greater depths including 1,000-1,500m in the North Sea andoff West Africa with depths of 2,000m to follow. For these depths floating production systems are inevitableand even at lesser depths may have some advantages. Titanium has been proposed as an alternative to thetraditional rigid steel or non-bonded flexible risers which are currently used. These are novel applications fortitanium and there is a lack of design data although the Heidrun drilling riser (RMI and Hunting Oilfields)operates to 300m and should provide some operational experience.

The project includes 8 oil companies - Mobil, Shell, BP, Norsk Hydro, Agip, Saga, Elf, Statoil with titaniumsuppliers RMI, Timet, Nippon Steel, VSMPO, 8 engineering companies, (4 of which are Norwegian), the UKHealth and Safety Executive and the research institute CRISM Prometey in the FSU which is undertaking muchof the testing.

The basic advantages of titanium are good corrosion resistance in seawater, high strength to weight ratio and alow modulus of elasticity. With such depths the lengths of steel required imposed considerable weightproblems. The aim of the project is to develop a validated design for titanium risers and flowlines covering thefollowing:

Conceptual studies• the feasibility of titanium risers and flowlines, selected cases, critical design parameters• criteria for the selection of an optimum alloy for a given design

27

Material properties of selected alloys• strength: mechanical characterisation, fracture mechanics, defect assessment• corrosion: seawater and well flow, stress corrosion cracking• fatigue: fatigue endurance, fatigue crack growth data, corrosion fatigue, fracture mechanics• welding: welding technology, properties of welds

Design• inspection methods and criteria• validation of design criteria, reliability studies• design guidance, handbook

An important aim of the project is the selection of appropriate materials. Ti-6Al-4V is being used as abenchmark but this alloy has limitations when used at temperatures above 80-100oC. In some cases the riserswill have possible internal temperatures in the range 100-200oC combined with expected exposure to brine,seawater or injection fluids. 5 suppliers/institutions working on alloys have agreed to participate in the projectproviding material samples and expertise and 7 alloys have been proposed as candidate materials.

A pre-project was run in 1994/5 and the full project commenced mid-way through 1995 and will run for 3years. Organisations such as the oil companies paying full-fee participation and the engineering companies andgovernmental agencies paying a reduced fee. At this stage it is not envisaged that titanium will replace currentriser technology but will be a beneficial addition. If the project proves successful each rig will require in theregion of 500 tonnes of titanium mostly in the form of seamless pipe; some supply problems have alreadyarisen as the recession has meant that companies have not invested in new plant or production techniques.

Also in Europe one BRITE-EURAM II project due for completion in 1995 is for the development of titaniumaluminide alloys for high temperature applications with IMI Titanium, Roll-Royce and Snecma as partners.

Within the USA increased expenditure for R&D is expected over the next years although with some variations.The estimated figure for 1994 was $177 billion and there is a 3% expected increase for 1995 to $182 billion.The Battelle Institute has indicated four main trends in R&D in the US:

• New high-impact commercial products resulting from technology systems applications

• more inter-company research within industry

• a growing awareness in the importance of technology for competitiveness by industry

• increased government funding for industry co-operative research

Legislation is being introduced into the US Congress to amalgamate the R&D activities of NASA, the NationalScience Foundation, the Department of Energy, the Environmental Protection Agency, the US GeologicalSurvey, the National Institute of Standards and Technology, the National Telecommunications and InformationAdministration, the National Technical Information Service, the National Oceanographic and AtmosphericAdministration and the Patent and Trademark Office in a single Department of Science.

Of concern to the titanium industry is the position of the US Bureau of Mines which has provided usefulstatistics and information regarding both the mineral and manufacturing aspects of titanium. The Bureau is tobe moved from Washington and amalgamated with other departments and it is reported that there will be cuts inR&D funds

The Office of Technology Assessment was created to provide legislators with analyses of public policiesrelated to scientific and technological change. It has been criticised for not meeting the needs of legislators andmay be axed.

Current thinking in the USA is the establishment of permanent R&D tax credits expanded to encompassindustrial support for the universities. It was felt that the large scale consortia e.g. the Sematech program for

28

electronic chip research had been inflexible, insulated from the commercial world and slow to respond tomarket dynamics.

Such contractor-managed laboratories of the Department of Energy as the Oak Ridge National Laboratory havebeen studied in the Galvin Report which has investigated the potential for cost-cutting exercises. It isconsidered probable that the laboratories will continue but with changes in direction and reductions in funding.

In October 1994 the National Aerospace Plane Joint Program Office closed the NASP program to begin workon the Hypersonic System Technology Program (HySTP). The aim is to focus on the feasibility of hypersonicpropulsion investigating ramjet propulsion through ground-based wind-tunnel tests and actual flight tests andidentifying the risks of the technology. The NASP papers will be archived for future analysis but this doesindicate the end of any such project in the US.

29

5 Applications

5.1 Introduction

In the USA, which is the largest user of titanium, some 70% of production is used in the aerospace industry.The remaining 30% is used in the chemical processing industry, power generation, marine and ordnance andmedical applications with further applications in leisure and recreation which have seen considerable growth in1995. The slow rate of change is indicated by a conference of industry experts in 1987 in which the percentageshare of industrial applications was given as 25-30% with slow growth. The balance in 1995 is given as 70:30aerospace:industrial although the aerospace applications are now seen as commercial rather than militaryaircraft. RMI Inc. predicts a split of 50:50 by the end of 1997.

The aim of the 1987 conference was to increase industrial uses and the then, current industrial applicationswere given:

Chemical processing chlorine caustic, sodium chlorate, hypochlorite, nitric acid

Petrochemical terephthalic acid, adipic acid, acetic acid

Paper and pulp chlorine dioxide, pulp digesters

Power- seawater cooled condensers, geothermal processing, nuclear waste treatment andhandling

Petroleum seawater cooled heat exchangers, crude sulphur removal, downpole piping

Additional markets were seen for titanium in the following applications:

Pollution control flue gas desulphurisation, nuclear waste storage, municipal sewage sludge, toxicwaste treatment, industrial scrubbers

Marine offshore technology, naval and merchant shipboard equipment, fishing,

Ocean Thermal Energy Conversion (OTEC)

Medical dental, implants, bone joints

The medical applications have developed as have the offshore components but development has been veryslow. Earlier estimates anticipated that flue gas desulphurisation (FGD) would consume millions of pounds(weight) before the year 2000.

It is interesting to compare developments in market thinking over the years and in 1994 the major non-aerospace applications for the US were seen as:

(i) Chemical and petrochemical process plant, (ii) Power plant condenser tubing, (iii)Desalination

Additional markets were seen for

Medical applications

High performance equipment e.g. ultracentrifuges

Electroplating equipment

Electrochemical anodes and cathodes

Cryogenic equipment

Major potential markets were seen in:

Marine applications

Road transport

Steam turbines

Military hardware

Emerging applications were seen as:

Flue gas desulphurisation

Offshore applications

Service water pipework for nuclear power stations

Downhole and sour gas handling

Possible applications were seen as:

Sporting equipment

Spectacle frames

Wrist watches

Vending and gaming tokens

30

Geothermal well casings

Wet air oxidation and similar waste treatments

Architectural applications

Jewellery

Cooking utensils

Burial caskets

5.2 Aerospace

5.2.1 IntroductionThe aerospace industry is worth $200 billion pa in new aircraft and $150 billion pa for spare parts. The industryis a major user of titanium and is now recovering from the economic recession with forecast annual growth of5% in air traffic.

The aerospace applications for titanium are based on high fatigue strength and fracture toughness and can bedivided into two main areas - airframes and aero gas turbines. Within airframes, titanium provides weightreduction in highly stressed parts especially the fuselage and wings; in the new Boeing 777 titanium is used forthe main landing gear truck beam. For each tonne saved the resultant saving is 1.5-2 tonnes of added flightrevenue. In gas turbines titanium is used in fan blades, compressor blades, discs, hubs and other rotating parts.A major limitation on the use of titanium in gas turbine engines is its temperature capability. However, alloydevelopment has succeeded in improving the temperature limit from 300oC for Ti-6Al-4V to 575oC forTi5331S although this is still less than nickel based alloys.

In 1961 less than 1 million pounds pa of titanium was used outside the aerospace industry, by 1971 16% ofproduction - 3.5 million pounds was used for industrial applications. Of the 76% used in aircraft in 1971 15%was used in the airframe, 31% in the engine of commercial aircraft and 10% was used in the airframe and 20%in the engine of military craft. There has been little change in the intervening years with most use of titanium inengine applications. Rolls Royce, UK, a major engine manufacturer used 1,280 tonnes of titanium in 1994which showed little change from 1993. Cost has been a major factor in the limited use of titanium; studies byBoeing showed that titanium would not replace aluminium structures in commercial aircraft because ofeconomic constraints. The studies showed that titanium would not achieve more than 10% of commercialsubsonic airframe structural weight until the mill product price of sheet, strip and plate is substantially nearerthe price of the main competitor - aluminium.

In designing a new engine all aspects of construction must be re-examined to ensure optimisation of efficiencyand economy. Materials must be included in this re-assessment. Even changes in the way the same metal is usedcan make substantial differences. In moving from the RB211 to the Trent engine, Rolls Royce stayed withtitanium for the fan blades but made them in a different way and reduced their weight. A layer of superplasticalloy is sandwiched between two preforms of a standard titanium alloy and the 3 layers are diffusion bondedunder high temperature and pressure. The large fan blades are at the coolest part of the engine but have to copewith any foreign objects sucked into the engine. The fan case is made of aluminium wrapped in Kevlar - one ofthe aramid fibres. In the compressor the temperature rises progressively to over 600oC and the blades have towithstand these temperatures. High temperature titanium alloys are expensive and difficult to process so lessspecialised alloys are used in the entry to the compressor moving to higher grades as the temperature rises. Theuse of titanium rather than nickel at the exit end of the compressor represents a weight saving of 100 lbs. Thecasing of the compressor is a nickel-based alloy steel casting whilst the superalloy Waspaloy is used in thecombustion chamber which has the highest temperatures. Part of the compressed air from the compressorbypasses the combustion section to provide cold thrust which provides greater efficiency, lower noise levelsand improved fuel consumption. This also makes the final section of the engine somewhat cooler which meansthat materials with a slightly reduced heat resistance can be chosen.

In all of these applications there is a trade-off between design, efficiency, cost, reliability, maintenance andmaterial properties. Modern engineering preference is to design away problems rather than apply a newmaterial with unknown problems which may impact on the complex inter-related structures. However, titaniumaluminides which are lighter than titanium and can withstand temperatures up to 800oC are being consideredfor the hotter part of the compressor and for the turbine blades.

31

5.2.1 Military aircraftTitanium has achieved its greatest use in defence aerospace but the ending of the Cold War and resulting "PeaceDividend" means that the percentage of titanium which was sold for military aircraft e.g. the Stealth bomber andfighter aircraft, is declining sharply although contracts are still being let. The US government awarded a contractin 1994 to a partnership of Lockheed Aeronautical Systems, Lockheed Fort Worth and Boeing Military AirplanesDivision to develop a new fighter aircraft, the F-22, as an eventual replacement for the F-15. The developmentcontract calls for the construction of 11 aircraft in the period to 2001 or 2002 following which orders areanticipated for a further 442 planes. Beta-annealed Ti-6Al-4V ELI alloy in forgings and plate stock will be usedin the plane and 37% of the structural weight is in titanium with other material use including composites andaluminium alloys.

The importance of military aircraft to the titanium industry is indicated by the following :

Table 4 The % use of materials in military aircraft

B-1B McDonnell.-Douglas Grumman(Stealth) .F-15E F14-A

Aluminium 42.5 49 39.4Titanium 17.6 32.8 24.4Steel 7 7.8 17.4Composites 2.3 2.9 18.2Boron - 1.3 0.6Other 30.6 7.2 18.2

Material costs constitute a small proportion of the cost of military aircraft - typically between 2-9% andconsequently there is less cost justification required for the use of advanced materials. In the mid-1980s the"buy-to-fly" ratio for titanium i.e. the ratio of raw material cost over finished product cost, was 3 which wassecond only to aluminium-lithium alloys. Raw material cost for titanium was $26 per pound with a finishedproduct cost of $76 per pound; aluminium-lithium raw material was $17 per pound with a finished product costof $72 per pound. By the mid-1990s that order had been reversed and titanium now has the highest buy-to-flyratio although titanium-aluminides which were not available for the earlier analysis would be more expensive.

One area of use in military aircraft has been for the Harrier Jump Jet where weight saving was a majorconsideration. Weight saving in vertical takeoff aircraft is a prime consideration so that any weight added to theairframe, engine or equipment leads to an equivalent sacrifice of fuel in order to get the plane off the ground.Thus titanium alloys account for some 20% of the dry engine weight of the Harrier - about 320 kg. In total, theuse of titanium in the Harrier is some 9-10% of the operational weight and the price differential for the use ofthe material was considered acceptable in this specialised situation.

In the airframe structure the use of a titanium alloy as a replacement for 35 components originally manufacturedin steel saved 23 kg weight. Further weight saving of 23 kg for 16,000 bolts was also achieved. Plate, skins andother components made from bar and forgings brought the total weight saving to 120 kg. The total weight oftitanium alloy used in the structure is 182 kg which is 8% of the structure weight. The original cost of thesesavings ranged between £28.5 for each kilo saved on bolts to £100 sterling for the more expensive components.

The North American Rockwell company undertook some sophisticated cost-weight trade studies based on theB-1 aircraft and these have provided a useful methodology which identifies potential cost and risk problems indesign applications.

The study selected typical areas of the airframe structure for detailed analysis. The selections were made by adesign engineer supported by structural, weight, production analyses and material selections. The selecteddesigns were developed as engineering sketches in sufficient details to permit the development of a detailedmanufacturing and tooling plan and a detailed cost and weight estimate. The process allowed the choice oftitanium components to be justified and the cost elements in material, fabrication, tooling and inspection wereidentified highlighting those cost areas where improvements would be possible.

32

Studies using the Trident missile indicated that the manufacture of the fuselage shell in titanium alloy wouldgive a weight saving of 23.6% over aluminium alloy but this would give a price ratio of 1.94:1 fortitanium:aluminium i.e. nearly double the cost.

Helicopters also face significant weight problems and the Lynx multi-service helicopter which was jointlydeveloped by Westland Helicopters and SNIA, France was designed with significant titanium use including asemi-rigid rotorhead and an electron beam welded transmission drive shaft.

Titanium has been widely used for the undercarriages of civilian aircraft but military aircraft have continued touse steel but a change is now being considered.

5.2.2 Commercial aircraftThe length of time required to adopt titanium into the commercial aircraft industry can be gauged from thefollowing figures. The Boeing 777 which is now in the early stages of production, uses just over 10% ofoperating weight as titanium compared to 6% for the Boeing 757 and 2% for the 767; both the latter aircraftbegan flying in 1982. The 707 used 0,.1% titanium and began flying in 1958. The Boeing 777 uses moretitanium in the airframe than any previous Boeing plane. Titanium use within the engine is much the sameamount as although the 777 only has 2 engines rather than 4 the larger size of the units means that, overall, useis much the same.

The decline in the commercial aircraft industry during the early 1990s is indicated by the following figures. In1992 Boeing delivered 446 aircraft in the 700 series, in 1993 the figure was 330 aircraft and in 1994 260aircraft. Airbus delivered 157 A-300 series in 1992, 138 in 1993 and 137 for 1994 with a similar number for1995.

With the Boeing 777 the company decided on 2 engines rather than the previous four which would have beenfound in such a large aircraft. Of the engine makers General Electric designed an entirely new engine but Prattand Whitney and Rolls-Royce chose to base their engines on previous designs.

In the case of Rolls Royce the Trent 800 engine is derived from the Trent 700 which is used to power theAirbus 330 and which itself is a derivative of the RB211 used on the Boeing 767, 747 and Lockheed TriStar.These 3-shaft engines are the most powerful turbofans produced by the company and represent a progressiveincrease in power. The original RB211 has a thrust of 37,000-43,000 lb which was increased to 58,000-60,000in later versions. The Trent series has a thrust from 68,000 lbs to over 100,000 lbs.

5.3 Defence

Titanium alloys combine light weight, high strength and damage tolerance which makes them ideal for bodyand vehicle armour although in this market they are in direct competition with the composite materialsincluding Kevlar and such materials as depleted uranium. However, many modern fighting vehicles embodytitanium either as discrete components or in laminated protective shielding. Additionally, the weight of fieldequipment, especially artillery, places severe restrictions on its mobility and titanium is being considered in thisapplication.

Establishing the use of materials in the defence industry is difficult as production is often subject to securityconsideration. However, VSEL, UK and Royal Ordnance, UK are competing for a contract for the AmericanArmy to produce a lightweight gun using titanium. The gun is an artillery piece for rapid deployment whichcould be carried in a Blackhawk helicopter and so avoid difficult terrain. Titanium-6Al-4V alloy is the materialcurrently being used although Ti-15-3-3 alloy may be used in future. Titanium was chosen for its strength toweight ratio as a major specification is that the gun must weigh less than 9,000 lbs. The weapon is currently inthe draft stage and has 2 tonnes of titanium with 0.5 tonnes of aluminium; production would be for 1,200 gunsbuilt over 10 years. Some problems have been experienced with distortion of the metal and with welding whichhas required special training courses for the welding staff.

33

It is reported that the FSU had built 6 Alfa-class submarines from titanium with a top speed of 40 knots -considerably in excess of that found in US submarines. The submarines were reported to have a 3,800 tondisplacement with a depth capability down to 3,000 feet and each using several thousand tons of titanium in thehull alone. One of those submarines is believed to have sunk in Scandinavian waters and political difficultiesmake recovery difficult. This is unfortunate as the titanium industry wish to establish the nature of the failure.For some time in the 1970s and 1980s the USA actively considered a titanium submarine but it was never built.

Early studies by the Royal Navy were concerned with the use of titanium for heat exchangers and a preliminaryassessment in 1954 indicated that there was no cost justification. However, in 1970 2 experimental seawatercooled heat exchangers for main engine freshwater cooling were manufactured in CP titanium and cast andwrought Ti-6Al-4V. The CP titanium tubes were expanded and seal welded into the tube plates and one unitwas fitted in a frigate with the other as control and subjected to laboratory tests. The unit fitted in the frigatewas only used for 1.5% of its 8 year life as studies indicated that copper base alloy components in the systemprovided sufficient copper ions in the water to prevent fouling.

As indicated previously, even in applications which appear to offer excellent opportunities for titanium themain route when dealing with the problems has been to design them away rather than apply titanium.

5.4 Automotive

The automotive industry is the prime target for many advanced materials including composites, ceramics andtitanium as it is thought that the large manufacturing volumes will kick-start the industries by providingeconomies of scale.

A major problem for titanium is the high cost of the material and its alloys which is not attractive to the verycost conscious automotive industry. However, the titanium industry has been working on the development oflow cost alloys. A further problem is that the full benefits of using titanium require re-design rather thansubstitution into existing designs. This is an expensive process and the automotive industry must be convincedof the cost-benefit before incorporating the process into a new development programme.

The Ford Motor Company commenced research in the 1980s on a range of advanced materials includingtitanium for suspension springs, valves and valve springs. The impetus for the work was the fuel economyprogramme Corporate Average Fuel Efficiency (CAFE). Ford reported that the substitution of titanium for steelin the valve train would reduce friction and could lead to fuel savings of 1.8% over the city driving cycle. (0.7mile/gall on the baseline level of 38.4 mile/US gallon). Mitsubishi undertook further work which indicated thata titanium valve retainer achieved a 42% reduction over a steel version and gave a 6% reduction in overallvalve train inertial mass.

There is general agreement in the automotive industry that there is little chance that titanium will findsignificant automotive use until the CAFE standards become more stringent or energy prices rise to a point atwhich titanium becomes cost effective or titanium costs decline significantly.

However, demand for more fuel efficient and environment-friendly road vehicles provides an interest in weightreduction and improved performance. Titanium, in common with other advanced materials, has a long record ofsuccess in racing and high performance cars. It has had some small use in engines for reciprocating parts, in thetransmission for drive shafts and stub axles, for springs and fasteners and has been demonstrated in the conceptcar Neon Life. In 1985 it was estimated that some 75,000 pounds of titanium were in use in racing cars andgrowth was forecast at 10-15% pa but this did not materialise.

Breaking into the volume car market is not easy and the cost-benefit studies may not always favour weightreduction. The latest version of the Volkswagen Polo is 50 kg heavier than the older version but rather thanreducing the weight the company has offered a 1600cc engine to cope with the extra weight. In a furtherexample, re-design of such steel items as the hollow stem valves have reduced some of the weight penalty andas steel is inexpensive compared to titanium, they are available at a lower cost. In 1985 studies indicated that arear motorcycle suspension spring weighing 1388g in steel would cost between $10-15 each. A titanium

34

replacement would weigh 640g each and would cost $450. Similar studies indicated that if the cost of titaniumcould be reduced to $5-6 per pound there was a market for titanium in intake and exhaust valves which wouldconsume 4 million pounds of metal each year. This situation has not materialised.

Ti-6Al-1.7Fe-.1Si was originally developed as a lower cost alternative to Ti-6Al-4V to replace steel forautomotive intake valves; the iron proving an effective and cheaper beta stabiliser than vanadium. The materialhas also been used for rocker arms and when replacing aluminium units in the valve train have had a success indrag racing but the material has not been introduced into volume cars. Specific applications include valvesprings, suspension springs, valves, valve retainers, rocker arms, connecting rods, torsion bars and exhaustsystems.

Various areas of the car have been targeted for weight reduction and a decrease in curb weight of 56.69 kgimproves the fuel economy by 0.09-0.21 km/litre in the Combined City-Highway Test of the US EnvironmentalProtection Agency. The Body-In-White (B-I-W) has been the subject of much materials research both formaterial alternatives and materials processing as it comprises 25% of the total vehicle curb weight. Currentinterest in the B-I-W centres on weight reduction, recyclability, cost control and exploiting new manufacturingtechniques. Performance of the Ti-6Al-4V alloy for car valves was never an issue but the cost was ofoverwhelming concern. Car manufacturers have enormous capital investment in existing technology (formingand assembly machinery, processing equipment) which constrains their materials substitution capability. Themost likely material to replace steel in the car body is aluminium alloy sheet which can be recycled usingexisting processing routes.

Although the volume car market is an obvious attraction for titanium heavy goods vehicles can be made toshow an attractive cost-benefit. Additional carrying capacity and/or the reduction in weight leading to fuelsavings have considerable attractions. A case study in the USA showed a weight saving of 140kg for an outlayof $1,500 when used in titanium springs in trucks. It is predicted that turning the weight saved into cargo over atypical 600 trips produces added revenue of $12,000 and a net annual return on investment of some 20%.

There has been some evaluation of gamma titanium aluminides for automotive exhaust engine valveapplications. Not surprisingly these studies concluded that the remaining hurdle is the development of a low-cost, high-volume manufacturing method

5.5 Bio-Medical

Titanium has now been used successfully as a medical material for over 40 years having been first used in 1951for plates and screws for bone fractures. The first implants were used in the mid 1950s for nails, plates, screwsand hip endoprostheses. The early implants were in pure titanium but this was replaced in the 1970s by Ti-6Al-4V which was later used in the ELI form and has demonstrated excellent biocompatibility. In 1980 a furtheralloy Ti-5Al-2.5Fe was introduced in the cast and wrought form for hip prostheses and other surgical implants.This was followed by a new wrought Ti-6Al-7Nb known as T 67/PROTASUL which was introduced in 1986.

Growing medical expertise means that there are now far more hip replacement operations and titanium isattractive for its non-toxicity, lightness and strength. Other applications include cranium plates, pacemakercases, rib cages and joints, screws, pins and dental implants. Studies of titanium and titanium alloys have shownthat upon exposure to the body environment a solid film of titanium dioxide is formed on the surface of theimplant materials i.e. the metallic surface undergoes effective passivation. This passivating film promotes thechemisorption of superoxide and hydroxide. These conditions are though to explain the excellent behaviour oftitanium and its alloys in living tissue.

Although most countries have stringent regulations concerning the use of drugs in medical applications it isinteresting that few countries have standards for the use of materials in the human body. Studies are currently inplace at the University of Oxford, Department of Materials to investigate the reasons for failure of hip joints;the studies indicate a wide variation in the chemistry of the materials used.

35

Implants replace work or non-functioning natural hard tissue and provide structure or cosmetic replacement.Factors of importance in the selection of an implant material include tissue reaction and degradation andsuccessful interfacing with viable tissue to avoid rejection. The use of titanium implants in dentistry has becomewidespread following work which identified the possibility of integrating titanium directly with the bony tissue.Further work has indicated that coating the titanium with apatite material - particularly hydroxyapatite show areduced healing period and improved bone apposition during the early stages of the healing process.

Studies have raised some concerns about wear with titanium hip joint prostheses specifically the wear of Ti-6Al-4V bearing against polyethylene in the presence of acrylic bone cement. In one series of studies whencompared with cobalt chrome and stainless steel components the titanium alloy components showed lightburnished patches in some portions of the contact zone. However, the problem appears to be related to the useof acrylic cement and no further problems were reported in use.

Titanium is a preferred material due to its light weight and bio-compatibility but the wear problems mentionedabove have lead some manufacturers to manufacture the head in cobalt chrome and the stem in titanium. Thestem may be machined from bar stock weighing 0.2 kg of which some 50% of the material will be wasted. Analternative process uses forgings which give a wastage of less than 10%. However, the die sets required forforgings cost some £7,500 per set and 2 or 3 sets may be required for a complex component.

The European market for hip prostheses is some 310,000 items pa of which about 20% will use titanium. TheUS market is both larger and with a larger percentage using titanium. This is partly due to medical liability inthe US if material is used which causes infection or allergic reaction. The cost of a total hip prostheses of thecemented variety, with a life of 10-15 years varies between £300-£700, the non-cemented type cost between£1,100-£2,000.

One major UK manufacturer - responsible for the hip prosthesis for HM Queen Elizabeth the Queen Mother -will use 2,700 kg pa of titanium bar stock with a further 2,000 kg pa in titanium forgings, before machining forboth forms. Manufacturers are already reporting price and supply problems with price rises of 30% beingquoted.

Timet have developed a new alloy - Timetal*21SRx for use in medical implants. The alloy contains 3%

aluminium and this is reduced to no more than 0.05% by increasing the level of oxygen in the alloy to maintaina comparable level of alpha phase stabilisation. The nominal composition of the new alloy is 15%molybdenum, 3% niobium and 0.05 aluminium with no vanadium. By early 1995, 500kg of the material hadbeen produced for evaluation by US companies. The material has a low elastic modulus which is desirable forimplant applications because it improves compliance between the device and the bone. Cytotoxicity testing hasbeen undertaken and biological reactivity has been observed. Results will be available over the two year testingprogramme.

Animal studies have indicated that implants made with Ti-%Al-7Nb/T 67 and Ti-6Al-6Nb-1Ta/T 661 haveshown that the biocompatibility of both alloys is equal to or greater than pure titanium and they areconsequently acceptable as implant materials.

One unusual area for titanium use is in the instruments used for opthalmic surgery where its lightweight natureis beneficial in delicate operations. Titanium use is not great but there is a high value-added factor. MicraInstruments, UK is one of some 5 companies world wide manufacturing these instruments. They use some 20sheets of titanium 2m x 3 m x 2mm a year each costing £1,000 and instruments sell at between £80-130 each. In1996 they will be selling 1,000 of a newly developed instrument costing £130 each to Johnson & Johnson,USA.

Titanium has also been considered for wheelchair frames and has been used for a small number of racing chairsbut the cost of titanium is too high for the volume market despite the obvious attractions.

Although important, the medical industry uses relatively small amounts of titanium, probably no more than 250tpa world-wide.

36

5.6 Leisure and recreation

Although attractive, the leisure and recreation industry is heavily driven by fashion which is changeable.Established materials fight to retain their market share and it is also the target of the composites industry which,in company with other advanced materials sectors, is looking for alternatives to the aerospace industry. It isestimated that some 45% of Japanese golf clubs are now manufactured from titanium; in the USA this figure is14% leaving considerable room for expansion. Factories to produce titanium golf clubs have already beenestablished in Taiwan and China.

Titanium is used in the USA for lacrosse stick handles and in baseball bats whilst there are applications in theUK for titanium bicycles. IMI reports that its 2 US foundries are casting significant numbers of golf club heads.One small company with 18 staff is consuming one tonne of titanium a week manufacturing the sole plate at thebottom of the golf driver and looks to diversify in 1996 into customised pistol grips for guns. Total USproduction of golf club heads is now estimated at between 60,000-100,000 a month. The US industry estimatesthat some 2,000 tonnes of titanium is being used in the American golf market including exports to Japan.Titanium use for this application is now estimated to be larger than for the defence industry for 1995. TheJapanese industry estimates that some 300-400 tonnes is being used in the manufacture of golf clubs in Japan.

The rapid growth of the leisure sector for titanium, in particular the golf clubs, is causing supply problems as ithas coincided with an upturn in the aerospace industry. One company which saw Ti-4Al-6V sheet at $12 per lbis now seeing the price as $33 per lb with a 26 week lead time. Many of the larger titanium companies will notoffer guaranteed prices and the company above has now managed to negotiate a contract with Teledyne WahChang for the supply of Ti-3Al-2.5V at a guaranteed price of $18.85 per lb for the next year. At least 4foundries have been set up in the last 6 months solely to produce golf clubs and there is a considerable backlogof work at the rolling mills.

A titanium matrix composite, CermeTi, produced with powder metallurgical techniques has been used for theproduction of high performance sporting goods. A lightweight golf driver insert is currently in production byDynamet Technology, USA who also have a softball bat under development. A hockey skate blade whichreduces weight by 40% over a conventional steel blade is in pilot production.The specialised bicycle industry has also made use of the light weight, high strength qualities of titaniumincluding its use in springs for racing bikes and as a frame material. This market has also been targeted by theadvanced composites industry who offer similar properties. One of the major markets for aluminium-basedmetal matrix composites has been for high quality mountain bikes.

5.7 Industrial

Experience shows that the technical advantages including weight savings and corrosion resistance allow for acost differential in aerospace of between two and ten times the cost of an alternative material. That pricedifferential is rarely acceptable in an industrial situation which indicates the need for lower cost materials.

5.7.1 Chemical processingTitanium has achieved considerable use in purified terephthalic acid (PTA) plants where titanium clad platesare used in the large reactors and solid material is used for the pipework, flanges, fittings, valves and othercomponents. A number of PTA plants have been announced in 1995 and demand is forecast to grow by 8-9%until the end of the decade. A 250,000tpa plant is being built for the Indian chemical company SPICPetrochemicals, Madras and will go onstream in mid-1997. ICI is also extending its PTA plant in Taiwan togive a capacity of 450,000-500,000tpa and this will come onstream at the beginning of 1997. ICI has alsoannounced a 400,000tpa plant for Pakistan which will also be completed in 1997. Amoco is planning new plantin Egypt, China and Indonesia with 3 PTA plants currently under construction in Taiwan (engineering byChiyoda, Japan) and in Malaysia and China (engineered by Technology Progetti Lavori SpA). The newlyindustrialised nations in the Far East and Asia Pacific have a growing demand for plastics and growth is inthose areas rather than the industrialised nations of Europe and the USA.

37

Titanium is finding increased use as a valve material in the chemical industry where its corrosion resistance tonitric acid and other aggressive fluids is appreciated. IMI reports that its US foundries casting golf club headsare also producing valve and pump components. Shiphams, UK a specialist valve manufacturer and part of thelarge Weir Group has delivered titanium valves to the FSU for a mining application. In further valveapplications, high temperature, high pressure valves have been provided for a purified terephthalic acid (PTA)process plant in China and 6" and 8" ball valves have been supplied for the Great Man Made River Project inLibya.

In the early 1960s titanium was very successful in electrodes for chlorine cells. The success of titaniumparalleled the development and adoption of dimensionally stable anodes. Market growth principally dependedon the retro-fitting of existing plants.

Titanium electrodes coated with precious metals or precious metal oxides are used for impressed currentcathodic protection, and as a substrate for anodes used in the production of chlorine. This latter has beenassisted by the evolution of a low cost welded tube product which is competitive in price with certain copper-nickel alloys, for containing brine or chlorine solutions during heating or cooling processing. Similarapplications include electroplating, metal recovery and electrophoresis and electro-osmosis and otherapplications needing long term electrode stability.

5.7.2 Flue gas desulphurizationTitanium is considered a low cost, lightweight corrosion resistant material for FGD chimneys with some

30,000m2 of titanium installed. Titanium alloys are increasingly seen as the best solution because of low life-cycle costs and an effective control of long-term environmental problems. The new standard ISO 14000requires best practice to ensure that gas scrubbing is seen as an integrated part of a whole environmentalmanagement system for which companies must be certified.

Acid-resistant brickwork can be used for FGD applications but requires a slight positive pressure which canpush moisture into the bricks thus accumulating acids and metal residues. Disposal of these residue-ladenbricks at the end of the chimney life could provide environmental problems. Outside FGD applications,operators of tall chimneys can benefit from the lightweight nature of titanium for pots and metal linings.Titanium sheet 1.5mm thick weighs 7kg/m2 and Resista-Clad titanium plate weighs 8kg/m2 which compareswith weights of 12/kg/m2 and 13kg/m2 for nickel alloy sheet and borosilicate glass block respectively.

The resistance of titanium alloys to acid condensation has been of value in flue gas desulphurizationapplications where titanium is used for the liners. It is only in unusual circumstances that acid concentrationspersist in FGD plant to the point that they constitute a serious risk to titanium linings. In areas which alternatehot/dry with cold/wet conditions, occasional transient light under-deposit or general corrosion may occur. Ingeneral, however, the titanium oxide film immediately "re-heals" so that no further attack occurs and this posesno threat to the integrity of the liner even over long exposure times.

Fluorides are known to be present at all stages of FGD processes. Tests have shown that even when fluoridesare present in deposits at concentration greater than 1% these levels cause no corrosion problems. Theresistance of titanium to FGD acidic fluorides is a result of the presence of metal ions, particularly aluminiumand iron, in condensates, liquors and sludges. These ions produce complexes with the active fluorides which areinert for titanium.

Increases in this market are dependent on the use of fuels which require titanium in the flues, normally coal andoil. The increasing use of gas for power stations largely removes this need. In those areas, such as China, whichhave large coal deposits and an increasing need for power titanium could find a market in this application. Itwill require joint ventures with the large civil engineering companies such as Foster Wheeler, UK whomanufacture the plant.

5.7.3 Offshore and marine

38

Floating platforms are making increasing use of titanium as its light weight can be used to reduce the weight ofthe top rigging of the platform. The metal is also highly resistant to sea water corrosion and to most fluidsfound in oil and gas wells. Its flexibility is an added advantage in connecting the platform to the seabed.

Titanium has been used in the offshore industry since the mid 1980s with projects such as the installation of thechemical injection lines on Ekofisk for Philips Petroleum and the selection of titanium for the replacement ofthe ballast water pipes by Mobil in 1986/7 for their Statfjord A and Beryl A platforms. In those applicationstitanium was chosen in preference to stainless steel on price, installation cost and on delivery.

Two Norwegian institutes - SINTEF, Tronheim and the Institute of Energy Technology, Oslo -have initiated amajor international, multi-disciplinary project bringing together titanium suppliers, oil companies andengineering companies. A pre-project in 1994/5 laid the basis for a major project which started in June 1995and will continue for 3 years to investigate the potential for titanium in risers and flowlines for offshore gas andoil. The titanium companies include RMI and Timet from the USA, Nippon Steel, Japan, VSMPO, FSU withthe UK Health and Safety Executive and CRISM Prometey, FSU, the oil companies BP, Shell, Elf, Statoil,Norsk Hydro, Agip, Mobil and Saga and 8 engineering companies including McDermott, USA part of theconsortium which won the contract for the development of the floating production system for the Foinaven fieldoff Shetland costing £550 million..

The oil and gas rigs in the North Sea and off the coast of West Africa are now descending to depths of 1,000-1,500 metres and even to 2,000 m. At these depths there is no alternative to floating production systems andthey may also be found in shallower fields. Titanium has been proposed as an alternative to the traditional rigidsteel or non-bonded flexible risers which are currently used. Problems have been found with titanium at thepressures at these depths but if the project is a success it will require something of the order of 500 tonnes oftitanium, mostly in the form of seamless pipe, for each rig.

These floating platforms are novel applications for titanium and there is no previous operational experience anda consequent lack of design data. The Heidrun drilling riser being installed by Hunting Oilfields and RMI willprovide some data but the conditions for permanent production risers for floating platforms are so onerous thatthe Heidrun design does not prove the feasibility of a titanium product. It is currently thought that titanium willnot replace existing technology but will be a beneficial addition to the technology. Some problems are beingexperienced with the supply of pipe due to the lack of investment in plant and technology during the recession.

RMI Titanium, USA and Permascand AB, part of the Akzo Nobel Group established a joint venture asPermapipe Titanium in October 1994 to produce welded heavy-walled pipe for the offshore oil, gas,petrochemical, pulp and paper industries. A new joint facility at Glomfjord, Norway was constructed and initialdeliveries were scheduled for the last quarter of 1995. The joint venture resulted from RMI's need to findapplications for titanium outside the aerospace industry and Permascand's desire to expand its tube makingactivities. The main target was the North Sea oil industry and its need for materials which would resist theadverse environment. The plant cost $5 million and had installed capacity of 13,500tpa although initial outputwas only expected to be 2,500tpa with feedstock supplied by RMI. The joint venture went into receivership insummer 1995 before it had made any deliveries because of lack of orders.

RMI won a contract in 1993 from Hunting Oilfield Services of Aberdeen, Scotland for the world's first titaniumhigh-pressure riser for an offshore drilling platform being built for Conoco Norway's Hiedrum project in theNorth Sea. A riser is the main support and containment component for the drilling casing and extends from theplatform to the seabed which can be 350 metres below. It is a seamless tube and the unit built by RMI consistsof over 30 major extruded titanium segments with an outside diameter of 24 inches each approximately 15metres long. Titanium has also been chosen for the stress points for the Spar Platform production riser systemin the Gulf of Mexico.

In January 1995, RMI Titanium, USA and Stolt Comex Seaway, Stavanger, Norway announced a joint ventureto develop, manufacture and install titanium production risers, flowlines and other subsea systems as a reliableand cost-effective alternative to existing products in duplex stainless steel and other special alloys.

39

Heat exchangers in offshore applications are of interest to the titanium industry for many years. Rolls-Royce isthe largest consumer of titanium in the UK and has joined with Alfa Laval to form a subsidiary Rolls Laval,Wolverhampton, UK which will manufacture heat exchangers for high pressure applications initially in theoffshore industry and then onshore in the hydrocarbon and chemical processing industries.

The new company will use aerospace technology to make a high-integrity product for gas cooling in offshoregas compression trains. The heat exchangers will initially be manufactured in Ti-6Al-4V with the possibility ofGrade 2 material for some parts. The thick-walled tubes used in the connectors are up to 25mm thickness andwith diameters up to 400mm whilst the bodies are formed from flat sheet which is 0.7mm or 0.8mm thick.Each heat exchanger will need some 5 tonnes of titanium and supply problems for both sheet and tube arealready being found for the anticipated production of 10 in 1996 and 20 in 1997. It is estimated that the NorthSea alone can provide a market which could be worth $15 - 30 million pa in the next 4-5 years.

An authoritative source in the titanium industry estimates that 1,000 tpa of titanium are currently used inoffshore applications including risers and tubing for fire systems.

5.7.4 DesalinationTitanium thin-walled tubes, supplied by the Japanese were used for the heat exchanger tubes in the Al-Taweelah B desalination plant commissioned by the Abu Dhabi Water and Electricity Department. The tubescomprised 850 tonnes of titanium and were supplied by the four Japanese titanium manufacturers - Kobe Steel,Nippon Steel, NKK and Sumitomo Metal Industries.

The Al-Taweelah desalination project in Abu Dhabi had a major effect on titanium end user statistics. In 1992it is estimated that Japanese manufacturers supplied some 1,300 tonnes of tubular titanium of which 500 tonneswas exported. In 1993 production had risen to 2,000 tonnes of which 50% was exported and of which some 400tonnes was for the Abu Dhabi project with a further 500 tonnes in 1994. Including tubular products 1993titanium mill product exports rose by 66% to 4,445 tonnes while total mill product despatches rose by 24% to7,713 tonnes. The final deliveries to Abu Dhabi were made in June 1994 but completion of the deliveries led toa fall in total mill product in Japan of 30% to just over 3,000 tonnes.

A comparison study by Sumitomo, Japan in 1991 indicated the difference which reducing the wall thicknesscould make to overall cost. With an estimated tube requirement for 5,400 km of 32mm the following cost permetre would apply:

CuNi tubes with 1.2mm wall thickness $55.31

CuNi tubes with 1mm wall thickness $46.14

Ti tubes with 0.7mm wall thickness $58.91

Ti tubes with 0.6mm wall thickness $50.62

Ti tubes with 0.5mm wall thickness $42.34

Sumitomo convinced the Abu Dhabi Water and Electricity Department that the thinner-walled titanium tubeswould perform to standard although cupro-nickel fabricated by Iritecna, Italy is still extensively used in boththe 2 Saudi desalination plants at Al-Jubail and the Abu Dhabi project.

An interesting application which illustrates the value of titanium is its use as tube in the heat exchangers for anew salt plant in the Netherlands. The project is probably the largest salt evaporation project with an estimatedcost of NLG350 million and was scheduled to come on line in November 1995. The evaporator tanks are madeof Monel cladding, the nozzles of solid Monel and the heat exchangers of titanium and Inconel 625. Cupro-nickel tubes were considered but considered unsuitable due to their lower resistance to corrosion abrasion. Over3,000 tubes with a diameter of 38mm and a tube length of 8,580mm were used with 3 of the heat exchangersmade in titanium Grade 2 and the other in titanium Grade 12.

5.7.5 Power plant

40

The deregulation of the energy sector has brought with it new approaches to the economics of energy supply.This deregulation has brought about a growth of independent power producers who now supply some 15% ofthe market and are expected to continue to expand with projections of 50% of the energy market by the year2000. The Asia Pacific region is expected to account for half of all new or replacement electricity capacity overthe next ten years. Independent producers place a considerable emphasis on reduced operating costs and earlyreturns on capital investment.

Some 80% of the power generation company’s costs are accounted for by fuel which has led to demands forimproved thermal efficiency. Combined heat and power systems have high thermal efficiency some 58%compared to 44% for coal fired stations; General Electric, US is claiming 60% efficiency for its latesttechnology. This improved thermal efficiency results from an increase in the firing temperature of the gasturbines and at 60% efficiency firing temperatures can exceed 1,500oC which calls for improved materials. Apower plant could be expected to have a requirement for 50-60 tonnes of titanium.

The turbine companies have made co-operative agreements with power station suppliers to replace the lostorders from the aerospace industry after 1990. Rolls-Royce signed an agreement with Westinghouse andSiemens has an agreement with Pratt & Whitney. The decline in orders from the aerospace industry has affectedall companies and Teledyne Allvac, USA saw orders for titanium and nickel alloys drop from 70% of itsbusiness to 50%. However, the move to land-based turbines could have benefits for the titanium industry asthey operate at higher compressor ratios and discharge temperatures than turbines for aero-engines. The bladein a helicopter turbine would be between 2 inches and 12 inches whilst that for a land-based turbine could benearly 2 metres. Weight is also an important factor as the blades and vanes on a gas turbine for a 150MW unit -typical of the size used in combined heat and power stations - would weigh some 5,500kg with combustorsweighing a further 900 kg.

Historically condenser tubing for power plant has been made from cupro-nickel alloys but under worst-caseconditions tube life can be reduced to 5 years compared with a design life of 30 years. Stainless steel has beenwidely used and is resistant to impingement attack but may suffer from pitting and crevice corrosion. Highchromium ferritic stainless steels containing molybdenum have been developed specifically for condenser tubeapplications. Cupro nickel alloys initially have improved thermal conductivity over titanium but this is reversedover the life. Other advantages for titanium include the ability to use thinner tubing and the potential forincreased cooling water flow rates. Titanium will be a preferred material when seawater or brackish water is thecooling medium.

The Central Electricity Generating Board, UK conducted extensive tests on titanium versus other materials forcondenser applications. The steam side of the condenser presents few material problems with little corrosion orfouling. However, the cooling water circuit presents a much more aggressive environment depending on thelocation of the power station. Power stations in coastal or estuary locations have water with high chloride ioncontent or which can be highly oxygenated and may contain high effluent levels including reducing sulphides.The water can also contain high levels of suspended solids and marine organisms. All of these indicate potentialdamage from general corrosion, pitting, stress corrosion, cracking and erosion by solid particles or cavitation.CEGB had 400,000 tubes in 24 units with service lives well over 40,000 hours which showed no failure due tocorrosion attack.

Because titanium made it possible to improve manufacturing methods, decrease tube gauge and offeroutstanding technical support there was a considerable increase in its use in this applications during the 1970s.The growth was aided by the fact that at that time the functional cost of titanium equalled that of cupronickelalloys. However, the growth rate in the area subsided once saturation retrofitting was achieved.

Geothermal applications offer potential for titanium as they are frequently used in brine or adverse fluidsituations. In November 1994 RMI, USA supplied titanium pipe casing in Ti-6Al-4V with 0.10% rutheniumworth $7 million to Magma Operating Company from geothermal wells descending to 700m in the Salton Sea,a large salt lake in California. Magma is producing energy by extracting high temperature - 300oC -supersaturated brines from the earth. Titanium’s resistance to corrosion by brine was a major factor in the

41

choice of the material. The traditional construction material has been low carbon steel which has a life of lessthan one year.

Probably as a result of the heavy dependence of France on nuclear power for its electricity supply, the Frenchcompany Cezus sells a major proportion of their output into the nuclear power plant sector. Some 80% ofCezus sales are in Europe of which about 70% are in the civil sector and most of these are for the nuclearindustry.

5.8 Building and Construction

Titanium has good resistance to corrosion, requires no maintenance, has high strength and is lightweight. Thesequalities have found good use in Japan - a major earthquake zone - which has promoted the use of titanium forroofs and as cladding for building with consumption of nearly 300 tpa.

Some 1,000 tonnes is currently in use which represents 600 km2 . The material is typically used with a thickness0.3 - 0.4 mm giving a weight of 1.35-1.8 kg/m2. Large areas of roofing can be carried which require lessmassive structural members. A variety of decorative surface finishes are available including permanent colourscreated by oxide film thickening. The material has been certified as non-combustible for roofing and claddingby the Japanese Ministry of Construction. Construction uses in Japan for titanium have included titaniumroofing for the Suma Aqualife Museum (1987), a safety fence made from titanium pipes at Yokohama HarbourPark (1991), the Fukuoka Dome with a retractable roof for all-weather activities (1993) and the wall claddingon the Tokyo International Exhibition Centre (1995).

Titanium has now found its first building application in Europe in an hotel in the Netherlands where it will beused on the roof of a pavilion in front of an hotel in Houten. The project follows an initiative "The house of thefuture" and "The office of the future" and has been designed to incorporate advanced technology climatecontrol and building maintenance in a computerised network. The roof is completely maintenance-free and hasbeen designed for a life-cycle of 500 years. The roof will consist of 4 tonnes of Grade 2 titanium plate with athickness of 0.4mm and is supplied by Timet, USA.

A further construction project in Europe is the new Guggenheim Museum being built in Bilbao, Spain whichwill have a titanium roof and titanium clad facades. Titanium was chosen over stainless steel becauseprocurement costs were equal but the low maintenance meant that life-cycle costs were in favour of titanium.Some 60 tonnes of 0.38mm gauge Grade 1 titanium strip is to be used. The material is supplied by Timet andfabricated in Italy.

The long and trouble-free service life of titanium roofs and cladding means that it is very competitive on a LifeCycle cost basis and at least one leading supplier provides a 100 year warranty against corrosion failures in roofapplications. Obviously, given a more stable industry with favourable cost structure titanium could achievegreater use in this area.

5.9 Other applications

5.9.1 FusionIn the late 1970s titanium was of interest to the fusion programme but other materials were found with higheroperating temperatures and more detailed knowledge on irradiation effects. New developments have meant thatthis area has been re-visited as titanium alloys have become commercially available which have compositionsand low impurity levels which enable them to be considered as on-the-shelf candidates for radioactive wastestorage. The titanium alloys include Ti-3Al-2.5V, Ti-5Al-2.5Sn, Ti-6Al-4V the standard industry alloy), Ti-10V-2Fe-3Al and Ti-15V-3Cr-3Sn-3Al. Research has indicated that if the first wall/blanket structure of afusion reactor using deuterium-tritium fuel were constructed from any of these titanium alloys, approximately100 years after shutdown their residual radioactivity would decrease by roughly 8 orders of magnitude. Forlonger times, the radioactivity would be dominated by the 26Al isotope which has a very long half-life. Althoughaluminium can be eliminated from titanium it is an efficient phase stabiliser and significantly improves titanium

42

tolerance to hydrogen. However, the best application for titanium would appear to be components out of theline-of-sight such as the vacuum vessel.

5.9.2 Food preparationTitanium shows good resistance to fruit acids and brines used in food preservation which with itsbiocompatibility is of value to the food industry. A leading Italian manufacturer of ovens and other foodprocessing equipment, Officina Carnevali is now using titanium ovens for equipment subject to wear and tear.The ovens are used in cooking pork and ham as they can handle conditions with 12-13% salinity in steam at 80-120oC; under these conditions steel ovens must be replaced every two to three years.. The Italian producerTitania SpA has launched a research programme involving the Istituto Superiore di Sanita and Centro Sviluppoe Applicazioni Titanio SpA to couple experimental activities with new standards for titanium applications infood preparation.

The excellent non-toxicity and biocompatibility which have made titanium useful in medical implants couldalso be used in the pharmaceutical industry.

5.9.3 Paper and pulpTitanium achieved considerable success in the 1960s in diffusers for paper bleaching. Titanium is cost-effectivein this applications because it makes possible the use of a more aggressive bleaching reagent, one which isharmful to stainless steel. However, because of concerns over hazardous waste streams, the paper industry hasconsidered alternative reagents which has affected the market share of this industry held by titanium althoughthere are indications of a resurgence of interest as other materials are shown to have service-life problems.

5.9.4 Cutting toolsTitanium nitride, titanium carbonitride and titanium aluminium nitride are all used as coatings to extend the lifeof cutting tools. The two main production processes are vaporisation in a vacuum chamber using small tabletsweighing 15-30 g and temperatures to 400oC. The titanium tablets react with gaseous nitrogen to form titaniumnitride which coats the rotating components with a 2-6 micron coating over a period of 3 hours. A furtherprocess, with wider use in the USA, arcs titanium from large billets of titanium. The latter system is cheaper butmore wasteful of material. In both cases intricate components up to 1 cubic metre can be treated and parts haveincluded connecting rods, axle hubs for racing cars which increases their life threefold.

There are basically 2 techniques used to apply titanium nitride coatings: chemical vapour deposition (CVD) andphysical vapour deposition (PVD) with a third technique becoming more common - plasma enhanced chemicalvapour deposition (PECVD). CVD has been available since 1969 but the high operating temperature can havean adverse effect on the components e.g. it overtempers tool steels. PVD, described above, becamecommercially available in 1981 and PECVD is still being developed as a commercial technique.

The major costs in either process is the cost of energy and labour with the depreciation of the large, £1 million,machines also a factor. The weight of titanium used is not extensive - one centre in the UK will use 4 kg ofmaterial in a year; the value of the material, world-wide is probably less than $20 million. This figure will growas the newly industrialised countries develop their own tooling industries. However, the percentage of use willnot change greatly as the titanium nitrides are probably not the preferred material for future use as othermaterials have higher lubricity. This factor will also restrict titanium use in the wear parts industry which wouldbe of much greater value than cutting tools.

5.9.5 ElectronicsA new market development is the use of high purity titanium in the electronics industry for a range ofapplications including computers and digital watches; most of the products are made to tight tolerances by nearnet shape techniques.

Most titanium sponge production - known as 4-9-5 - is 99.995% pure but 2 Japanese manufacturers havecommercial production capability for a 99.999% pure sponge known as 5-9 and with potential electronicapplications. Production of this sponge is currently limited to 50-60tpa but could increase to 100tpa in the next2 years. The high purity sponge is some ten times more expensive than standard sponge.

43

5.9.6 SuperconductorsThe use of superconductors in power generation and transmission has been an aim for many years andniobium-titanium wire has been extensively used. However, the commercial applications have been limited toNMR magnets for whole body scanners and for research applications. The problem with superconductors inpower generation has been the requirement to cool and maintain the material at liquid helium temperatures.The matter has again been raised with world interest in high temperature superconductors but these are almostentirely based on the rare earth materials; titanium is not a factor in this area although it may be used for smallsuperconducting motors and generators. Intermagnetics General Corporation, USA have many years experiencein producing niobium-titanium and niobium-tin superconducting wire, tape and cable but are now looking toapply the processes to the manufacture of rare earth superconductors.

A transformer using high-critical-temperature superconductors will be designed and built by ABB AB usingtechnology and components developed by the American Superconducting Corporation. The project is acontinuation of an earlier one in which ABB designed and tested as low-temperature transformer cooled byliquid helium. The 2 companies will design, manufacture and test a 630kVa transformer which is the first steptowards the development of large, commercially viable transformers. The transformer will use liquid nitrogenas both coolant and dielectric fluid. Upon completion in late 1996 the prototype transformer will be tested inthe power grid in Geneva, Switzerland. The project has the support of Electricité de France, SIG, the electricutility company in Geneva, a research consortium of the Swiss electricity supply utilities and the SwissDepartment of Energy.

5.9.7 Consumer goodsThe Japanese have developed a considerable market for titanium in a range of consumer goods includingspectacle frames, cookware, watches and jewellery. Titanium is popular for spectacle frames because of itslightweight and with this and other consumer items attractive colourings and finishes can be provided. It shouldbe noted that this market is also attractive to other manufacturers of advanced materials; Rado Watch Co. Ltd,Switzerland has developed the Sintra watch made solely from ceramics with a titanium carbide bracelet and asapphire watch face.

44

6 Geographic markets

6.1 North America

Titanium sponge metal is produced by Titanium Metals Corporation (Timet) and Oregon MetallurgicalCorporation (Oremet) and ingot is made by the 2 sponge producers and by 9 other companies throughout theUSA including RMI Titanium Company who have withdrawn from sponge manufacture. About 30 companiesproduce titanium mill products or castings. The major producers - Timet, Oremet and RMI - although havingfull order books and lengthening delivery times are still not profitable and do not expect to return toprofitability before the latter part of 1996. Investment in the US industry has been lower than depreciation overthe last 5 years.

The US is the largest market for titanium and consequently both manufactures much of its own requirementsand imports from other countries. The starting point for titanium production is sponge and the following tableindicates US requirements.

Table 5 US sponge and slag requirements (000’s tonnes)

1990 1991 1992 1993 1994Titanium slagImports 374 408 537 476 472Consumption 391 341 539 546 583

Sponge metalProduction 24.7 13.4 13.7* 13.1* 10.9*Imports 1 0.6 0.7 2.2 6.5Consumption 23.2 13.6 14.2 15.1 17.2

Price/lb (12/95) $4.50-$5 $4.50-$5 $3.50-$4 $3.5-$4 $3.75-4.25

* Estimated as following the withdrawal of RMI from sponge production, the production figures are withheld to avoiddisclosing company proprietary data.

Imports of sponge to the US will probably be higher in 1995 as AVISMA in Russia had exported 3,000 tonnesof sponge to the US by October 1995. Ust Kamenogorsk, Kazakhstan, with much larger production, will havecertainly exported at least that amount and imports from Japan traditionally average 1,000tpa.

The US produced some 16,500 tonnes of titanium mill products in 1994 which has increased to an estimated20,500 tonnes in 1995. Of that production some 70% will be titanium alloys with the remaining 30% ascommercially pure titanium. The US exports for 1995 will be some 3,500 tonnes with very small imports. TheUS industry has not been affected by imports of FSU mill products due to the very high anti-dumping duties.

Table 6 US imports for the consumption of titanium metal (000’s tonnes)1992 1993 1994tonnes $000’s tonnes $000’s tonnes $000’s

SpongeChina 230 180 1,330 86 452Japan 321 338 2,830 819 5,690Russia 0 1,160 3,910 5.460 15,400Ukraine 0 292 727 0UK n/a 101 1,310 94 975Others 133 89 375 4 7TOTAL 684 2160 10,500 6,470 22,500

Waste/ScrapCanada 269 186 447 214 364China 49 0 0

45

France 6 86 559 1,770 307 1,030Georgia 66 0 0Germany 1207 986 3,060 425 1,130Japan 1509 1180 4,610 1,560 5,480Russia* 189 578 1,620 1,140 3,540USSR* 309 0 0UK 1451 1500 4,760 1,430 4,560Other 522 429 1,510 794 2,970TOTAL 6257 5519 1957

Ingots/billetsRussia 109 578 377 2,330UK 160 2,030 749 9,530Other 2 428 603 3,640

Wrought products and castings**Japan 231 6,710 320 11,900Russia 33 299 107 1,140UK 195 5,370 178 5,490Other 141 4,860 196 5,140TOTAL 600 17,200 801 23,700

Powder 37 813 79 981

*The figures reflect the changing political circumstances following 31.12.91** Includes bars, castings, foil, pipe, plates, profiles, rods, sheet, strip, tubes, wire and other

A high proportion of all titanium products from sponge to finished components manufactured in the US are forthe US market but there is also an export market with Japan and Europe mostly in alloys which are the majorportion of the US production.

Table 7 US exports of titanium products

1993 1994Quantity Value Quantity ValueMetric tonnes $000’s Metric tonnes $000s

MetalSponge 104 748 126 738

Scrap 3,890 9.070 2,120 7,440

Other unwrought

Billet 240 4,790 258 5,250Blooms andsheet bars 342 6,280 630 12,000

Ingot 275 4,010 374 5,970

Other 654 12,000 297 4,440

WroughtBars/rods 663 18,000 863 22,500

Other 1,720 54,700 2,990 108,000

TOTAL 7,890 110,000 9,660 166,000

For comparison, the figures for titanium oxides, dioxide and pigments for 1994 were 352,000 tonnes valued at$485 million.

In the USA, titanium has been very much a one-industry material with up to 80% of titanium use in theaerospace industry although this has probably declined to 70% in 1995. This industry has been in depressionfor some years resulting in efforts to develop other markets. The improved prospects following orders for the

46

Boeing 777 and predicted growth in the aerospace industry from 1997 onwards may affect the development ofthese other markets. The US titanium industry predicts that aerospace use will decline to 50% by the end of1997. The Japanese, possibly more realistic on the time taken to develop industrial markets and viewing theshort-term nature of much US (and European) industrial planning, predict a level of 65% for 1998.

The breakdown for the 30% of titanium used in industrial applications in the US for 1994 is:

General chemical 18% Electrolysis 6%Power condensers 10% Pulp and paper 12%Water technology 8% Metal finishing 3%Down hole 3% Oil refining 4%Gas turbine 4% Medical 8%Navy/Marine 10% FGD 3%Automotive 6% Other 5%

The figures for 1995 will show some variation due largely to the unexpected increase in the amount of titaniumused for golf clubs; other leisure applications are also being sought. There is considerable potential for the USleisure market but it is a fashion industry and - as its unexpected growth has shown - liable to rapid changes.General chemical use will remain the major industrial application although the plant constructed may be forexport. Pulp and paper had seen a decrease by appearing to have recovered as the alternative materials do notmeet the adverse conditions.

The decline in the number of military aircraft ordered will be reflected in future markets, but commercialaircraft will remain strong for the new 2 years. As this is the largest single market for titanium, withapplications which are known and understood it is very possible that companies will attempt to make up theshortfall in military applications with commercial aircraft.

The market for chemical plant will remain steady as the increasing requirements for tighter emission control arebalanced with limited capital investment in new chemical plant in the US. Many plant operators are finding thattheir major markets are in South East Asia and South America which involves the titanium industry formingalliances with the plant manufacturers. Both chemical and oil industry applications could provide retrofittingopportunities in the US.

Flue gas desulphurisation will not show any change in percentage as much new power plant in the US is gasfired with an increasing use of renewable energy sources such as wind and solar.

The building sector in the US has been depressed for some years and this is particularly so in the commercialsector which could be expected to make use of titanium for roofing and cladding. California - an earthquakezone like Japan - has potential and titanium’s low maintenance has not been fully exploited.

The motor industry has limited applications in the US as in other geographic areas until there are majordecreases in price and improvements in availability which do not look feasible in the next few years. Titaniumhas a remote possibility in the automotive industry in California where anti-pollution legislation is pushing thedevelopment of battery powered cars. Titanium’s lightweight could offer advantages but this market willprobably be taken by aluminium.

6.2 Japan

Without a domestic aircraft industry to provide profitable orders, Japan’s titanium fabricators were forced fromthe beginning to seek industrial opportunities for commercially pure titanium rather than developing titaniumalloys for the aerospace industry. Aerospace use has grown from 12% in 1989 to 14% in 1994 and is predictedto decline to 10% by 1998. The Japanese titanium industry has been badly affected by the strength of the Yenalthough that has now stabilised. Imports of cheap material from the FSU have doubled each year and nowstand at some 4,000tpa which further unbalances the market. Industry reports indicate that FSU titanium is now

47

priced as slightly below the Japanese price. None of the Japanese titanium manufacturers currently makes aprofit although they hope to return to profitability by mid-1996.

Titanium mill product output in 1994 was 8,600 tonnes and the estimate for 1995 production is slightly over9,000 tonnes of which 95% is commercially pure titanium. Titanium sponge production from the two suppliers- Sumitomo Sitix and Toho is between 15-16,000 tonnes. Sheet and plate sell at between $20-30 per kilo andthe turnover for the titanium industry in Japan, including raw material and the value of the products produced,is estimated at some $500 million. Most titanium alloys are imported from the USA including those used inJapan’s small aerospace industry.

A wide range of industrial applications has been developed with particular emphasis on chemical processingplant and thin walled tubes in heat exchangers for the power generation market. Some 300tpa is used for roofsand cladding for buildings with a further 300-400tpa used for the manufacture of golf clubs. The Japaneseestimate that it took 10 years to establish and develop the market for thin-walled tube used in desalinationplants in the Gulf states although the finish of those projects lead to a major decrease in titanium shipments.Japanese manufacturers have made major efforts in recent years to develop consumer applications with thepercentage share of the market growing from 4% to 21%.

The Japan Titanium Society have estimated the breakdown of mill product use in Japan in the following table.

Table 8 Market distribution of titanium mill products in Japan

1989 1990 1991 1992 1993 1994

Chemical Processing industry 1,822 1,472 1,389 1,126 889 1,274Power utilities 593 1,372 949 702 725 743Desalination 49 0 10 6 0 12Aerospace 232 226 237 253 239 162Others 1,118 1,061 1,306 1,359 1,419 2,050

Total 3,814 4,131 3,891 3,446 3,272 4,241

Much of the growth in the "Others" category reflects the Japanese move into leisure and consumer goods. Themarket for titanium in Japan is valued at some $500 million although difficulties in counting through the titaniumsupply chain mean that this figure should be treated with some caution.

The Japanese manufacturers collaborate in the titanium supply as the following example of the desalination plantsin Saudi Arabia and Abu Dhabi indicates. Toho Titanium supplies titanium ingot to Nippon Steel to be fabricatedinto tube. NKK takes a similar route with Nippon Mining and Metals. Kobe Steel buys sponge from SumitomoSitix (formerly Osaka Titanium) which are rolled at a plant which used to belong to Nippon Stainless Steel beforeits merger with Sumitomo. The Japanese industry feels threatened by the US industry and its reliance onaerospace which they feel unbalances the market. They are also concerned at the mergers in Europe and betweenUK and US manufacturers.

Japanese industry has an excellent reputation for the production and publication of manufacturing statistics andJapan Titanium Society been very open in its statistical reporting. JTS is attempting to persuade other geographicareas to collaborate both in this and in the development of international standards through links between tradeassociations. Europe is a problem in this as it does not have a trade association. The Japanese situation is helpedby a strong trade association and a lack of historical military involvement. Table 9 is taken from a presentationby the Chairman of the Japan Titanium Society at the Birmingham Conference in October 1995..

Table 9 Japanese titanium shipments (Figures in brackets refer to titanium alloys)

48

1989 1990 1991 1992 1993 1994Titanium spongeProduction 21,341 25,630 18,945 14,554 14,426 14,847Domestic shipments 16,593 18,631 13,915 10,881 12,132 11,235Exports 5,495 6,455 3,376 3,395 2,962 4,516Total shipments 22,088 25,086 17,291 14,776 15,094 15,751Ingot Production 15,510 16,968 12,434 9,665 11,968 12,062

(1,843) (1,831) (1,743) (1,512) (871) (1,014)Mill ProductsDomestic 3,814 4,131 3,891 3,446 3,272 4,241

(324) (409) (510) (468) (409) (468)Export 4,655 4,833 3,426 2,791 4,374 4,403

(183) (157) (96) (79) (48) (12)TOTAL 8,469 8,964 7,317 6,273 7,646 8,644

(507) (566) (606) (547) (457) (480)

The above figures have been compiled from information supplied to the Japan Titanium Society by itsmembers. Mill product shipments for 1995 are some 9,000 tonnes. The titanium industry in Japan has beenadversely affected by a combination of a strong Yen, world recession and cheap Russian products. The titaniumcompanies are currently losing money but hope to break even by mid-1996.

Table 10 Destination of exports of Japanese titanium sponge

1989 1990 1991 1992 1993 1994USA 901 923 383 1,090 840 1,232EC 4,969 5,408 2,737 2,356 1,931 3,386Others 52 140 280 598 126 16Total 5,922 6,471 3,400 4,044 2,897 4,634

Table 11 Destination of exports of Japanese mill products

1989 1990 1991 1992 1993 1994USA 731 481 354 240 260 495Europe 3,393 3,264 2,393 2,192 2,470 2,226(EC) 2,737 2,274 1,622 1,421 1,654 1,472Others 905 1,259 1,340 708 1,549 2,039Total 5,029 5,011 3,987 3,140 4,279 4,760

Table 12 Source of imports of titanium sponge to Japan

1989 1990 1991 1992 1993 1994USA 150 157 173 431 366 601EC 140 31 94 155 409 97CIS (FSU) 513 376 491 615 1,182 3,150Others 20 14 49 99 73 36Total 823 578 807 1,300 2,030 3,884

Table 13 Source of imports of titanium mill products to Japan

1989 1990 1991 1992 1993 1994N America 229 148 264 154 170 582Europe 6 9 6 17 25 80CIS (FSU) 2 - 1 8 89 71Others 1 52 7 2 2 5Total 238 209 2778 181 286 738

49

The above figures have been compiled from Custom clearance statistics and supplied by the Japan TitaniumSociety.

The above figures show the major increase in sponge imports from the FSU following the closure of Japaneseplant, indications for 1995 are that the figures will be lower. There is a slightly increased use of titanium millproducts in 1994 over 1989 and this is largely due an increase in imports of some 500 tonnes. The balance ofJapanese shipments between domestic use and exports has changed between 1990 when it was 54% exports:46% domestic and 1995 when it is anticipated that it will be 45% exports: 55 domestic. The pricing of FSUmaterial is certainly a factor in this situation.

6.3 Europe

In 1994 domestic demand for titanium mill products in Europe was 7,400 tonnes of which some 60% wasmanufactured in Europe with the remainder imported from Japan, USA and FSU. European production wassome 4,500 tonnes most of which was used within Europe leaving a small amount for export.

Of the European titanium manufacturers the UK and France have concentrated on the aerospace industry withfurther applications for the North Sea (UK) and nuclear power stations (both countries). These applicationshave tended to be for alloys and the industry has taken less material from the FSU. IMI in the UK with overallcapacity of 5,000tpa has now withdrawn from the manufacture of CP welded tube and Ti-6Al-4V sheet; Timethas welded tube plant, so rationalisation following merger is indicated. Germany and Italy have concentratedon industrial applications including condenser tubes and chemical plant and have taken much material from theFSU; Titania in Italy is essentially a re-roller for FSU material. On average some 55% of titanium in Europe isfor aerospace use and there are now efforts to reduce this to 50% over the rest of the decade.

The industry in Europe is hampered by the lack of a trade association which can provide market information,trade statistics and a focus for the industry. IMI is to be merged with Timet which could affect the arrangementwith Cezus although if that arrangement fails may be replaced with a link to another US company. The majorinternational companies who originally moved into advanced materials such as ICI, BP and Pechiney have nowwithdrawn.

European production is balanced 70% alloy and 30% commercially pure. The major industrial applications inEurope are in offshore plant, condensers, piping in nuclear power stations and chemical plant. Growth inEurope is seen for offshore applications and environmental applications such as flue gas desulphurisation forcoal fired power stations which are funded by external sources. However, most growth will result from exportsto South East Asia and these will result from arrangements with the major plant engineers.

6.4 Former Soviet Union

Prior to the ending of the Cold War the FSU was both a major producer and consumer of titanium, mostly inthe aerospace and defence industries. Following the end of the Cold War, large amounts of titanium as sponge,scrap and metal were dumped on Western markets adding further problems to an already difficult situation.FSU is one of the largest manufacturers of titanium, sponge, scrap and mill products and supplies companies inJapan, USA and Europe although the industry notes that the low prices of previous years have now risen to sit,in may instances, just below Japanese prices. It is considered by many experts that the FSU plants could supplythe entire world requirement for titanium given an injection of capital and management. However, there areregular reports that some management is controlled by the Russian Mafia, bribes are necessary fordocumentation, deliveries are irregular and some certification is forged. Some material supplied by VSMPOfor the Norwegian Heidrun project for which Conoco is the main contractor has caused problems.

Comprehensive data on capacity, production, imports and exports is not available from FSU partly due to abreakdown in centralisation and partly due to a law of 1956 which made it a treasonable offence to reveal non-ferrous material statistics.

50

Of the major plants, Ust Kamenogorsk in Kazakhstan is producing sponge from some of the most efficient,modern plant in FSU but dependent on feedstock from Russia and the Ukraine. In 1992 the Kazakh governmentannounced that they had given exclusive marketing rights for 4,000 tonne of sponge to the Chori Corporation inJapan. The Zaporozhye Magnesium and Titanium Works in the Ukraine was the earliest supplier of sponge inthe old USSR, mostly for military applications. The plant is old and inefficient and was shut down in 1993 for are-fit from which there are no reports of it re-opening. The Berezniki works of AVISMA began producingsponge in 1960 and was reported as planning new, 40,000 tpa plant in 1992 but in August 1993 reportsindicated that production was to be cut as demand was falling in the FSU. At that point the plant was reportedas running at 50-60% capacity. Berezniki and Us Kamenogorsk were reported to have formed a joint stockcompany - Redmetservis - which involved sharing the raw materials base and co-operating over the productionof titanium scrap. Relatively little is heard in Europe of the activities of AVISMA and Ust Kamenogorsk,unlike VSMPO which regularly advertises in the trade press, and it may well be that they have decided toconcentrate on the Japanese market. The Berezniki works was reported as having 102 magnesium reductionfurnaces and 146 separation furnaces.

Companies such as Verkhnaya Salda Metallurgical Production Association (VSMPO) are now constituted aspublic companies and are seeking certification by foreign aerospace companies to go with the ISO 9002certification obtained from TUV, Germany in August 1993. The bulk of manufacture is of commercially puretitanium and Ti-6Al-4V products but other alloys are now being manufactured and there is a lead time ofbetween one and three months. Overseas shipments in 1994 were 3,800 tonnes and this may double in 1995.The ratio of domestic to export sales is now 45:55 from the equal split of previous years.

The titanium sponge producer, Avisma, previously known as Berezniki Titanium and Magnesium Works(BTMK) has announced that it expects production for 1995 to be 25-30% higher than 1994 with domesticdemand accounting for 9,000 tonnes. Exports account for 40-60% of production which would indicate a totalproduction between 16,000-20,000 tonnes. Exports have increased with sales of TG100 12 x 25mm priced at$6.30-6.70 per kg. Exports for the month of August 1995 totalled 300 tonnes to the USA, 100 tonnes to Japanand 400 tonnes to Europe.

The isolation under previous governments in the FSU with their large research efforts and extensive use oftitanium had led to processes and manufacturing techniques which are still not used in the other majormanufacturing countries. As an example, the Paton Welding Institute, Kiev, Ukraine has developed weldingtechniques which could make up to 70% cost savings in the manufacturing of titanium components.

A problem with the FSU is that political changes have caused problems for the titanium industry beyond thecollapse of the defence market. AVISMA (BMTK) is in the Ukraine, Ust Kamenogorsk, the major spongesupplier is in Kazakhstan and VSMPO is in Russia. Companies such as Ust Kamenogorsk want payment inhard currency from VSMPO. Energy costs, previously kept at artificially low levels, have risen and thetransport infrastructure is poor. The Titanium Association which previously had a central role has difficultieswith companies which are now increasingly commercial. Most estimates of FSU production are based onguesses and the entire titanium industry wishes to predict future production.

6.5 Other

6.5.1 South-East AsiaBaoji is the largest titanium semis producer in China and is reported to have quadrupled production following aten year investment programme. Baoji’s plant is now reported to produce 2,500tpa which accounts for 80% ofChina’s output. Further modernisation is expected to raise the plant’s capacity to 5,000tpa which would put it inthe same league as IMI Titanium, UK, Oremet, USA and Kobe Steel and Toho Titanium, Japan. It would stillbe much smaller than the two major world producers Timet and RMI, both in the USA or the FSU facilities.

One of the most important non-aerospace applications for titanium is in power station condenser tubes and thishas benefited from several large projects in China and South East Asia. Growing industrialisation in this areacoupled with rising living standards will require more power plant to the end of the century. In South Korea theelectricity supply industry is noted as operating with a 2% margin of surplus power.

51

Rising living standards and the demand for plastics have lead to a growing number of chemical plants includingPTA plants; South East Asia is seen as the major growth area for such plants for the rest of the decade. Thepotential for titanium will depend on the formation of alliances with the major plant contractors but growth inthese areas is typically rated at up to 10% pa to the year 2000. However, if Chinese titanium mill productproduction is to increase it may supply these applications. Factories manufacturing titanium golf club parts havealso been noted in China with much of the production for export.

6.5.2 IndiaIndia has now entered the titanium production industry with a plant commissioned in October 1993. MishraDhatu Nigam (Midhani), Hyderabad has the ability to produce tube using a tube pulling device rather than themore conventional strip pushing. The company claims that this produces an improved scratch-free surface.Midhani is a Government of India enterprise under the Ministry of Defence with technical know-how acquiredfrom such European countries as Krupp Klockner, Germany, Pechiney, France and VIAM, Russia. Thecompany is looking for strategic alliances with foreign companies but expects to find good markets in thepower generation business.

The plant is predicted to produce 1,500tpa, specialising in tube product for industrial uses where there is asomewhat lower quality requirement than the aerospace industry.

Since the economic liberalisation of 1991 by Prime Minister Rao, India has shown very considerable industrialgrowth including chemical processing and fertiliser plant both of which would provide a market for titaniumpiping and valves. The chronic power shortage is also being addressed. India has considerable coal reservesand major coastal cities the combination of which could lead to titanium sales for condenser tubes and heatexchangers and for flue gas desulphurisation. Pollution has become a major issue in India and retro-fitting toplant is a possibility.

India’s oil industry is currently established in the North-Western states such as Assam which have hadconsiderable civil disturbance. India has a considerable offshore oil and gas exploration programme in placeand developments in the North Sea could be applied both off the Indian coast and the other oil and gas areas ofSouth-East Asia such as Vietnam, Borneo and Brunei.

Other potential markets for the rest of the decade are power and chemical processing plant in Singapore,Malaysia, the Philippines and Indonesia. These countries have rising living standards and high growth rates forthe installation of industrial and power plant.

6.5.3 Middle EastTitanium thin-walled tubes, supplied by the Japanese were used for the heat exchanger tubes in the Al-Taweelah B desalination plant commissioned by the Abu Dhabi Water and Electricity Department. The tubescomprised 850 tonnes of titanium and were supplied by the four Japanese titanium manufacturers - Kobe Steel,Nippon Steel, NKK and Sumitomo Metal Industries. This follows an order in 1986 for 150 tonnes of tubing fora desalination plant in Saudi Arabia and major orders between 1978-1981 for two large desalination plants inSaudi Arabia. The final orders were supplied to Abu Dhabi in 1994.

Living standards will continue at a high level with the associated demand for water which indicates that furtherdesalination plants are possible. Additionally, there are moves to install petrochemical processing plants closeto the source of supply and to provide industry for the next century. The oil industry also has continuedpotential and thus could offer titanium applications - at the right price.

52

7 Markets and forecasts to year 2000

7.1 Markets

Excluding the FSU, where statistics are unreliable, the largest single market for titanium has been the aerospaceindustry in the US. Of the 75% of the titanium used in aerospace 30% was used in military aircraft and thatmarket has declined and will not grow for the rest of the decade. Although commercial aircraft orders are nowincreasing and spares - a large part of the market - are continuing, the commercial market cannot absorb themilitary loss. This indicates that the industry must either reduce in size - this is happening and will continue - orfind alternative uses for titanium. One major US company is predicting a change to give 50% industrialapplications and whilst this is possible - though not probable - it will depend on the price of titanium and itsavailability. Considerable price increases have occurred in 1995 and there are no indications that they will bereversed in future years.

Emphasis on the aerospace industry allowed the titanium industry to concentrate its sales and marketing effortson a single industry which took very large quantities of material. As an example, the landing gear beam for theBoeing 747 required 3,800 lbs of Ti-6Al-4V. In 1992 Boeing delivered 446 aircraft in the 700 series, in 1993the figure was 330 and in 1994 the figure was 260. In November 1995 Singapore Airlines placed a $12 billionorder for 34 Boeing 777s which will lead to considerable demands for titanium. Other improvements in theaerospace industry have meant that lead times on delivery for titanium sheet and alloy plate were alreadystretching to the end of 1996. The new orders for aircraft mean that some 3,000 tonnes of titanium is requiredbetween 1997 and 2002.

This level of use cannot be approached by any other industry and no other single industry can absorb thisquantity of material. If the industry is to survive it must diversify and this requires a much larger marketingeffort as new applications will each require a different approach. This requires material specifications whichmeet a range of applications and greater training for users downstream. As an example, aerospace companieshave extensive experience of handling titanium including welding but this is not found in other industries.

Many industrial applications can be met by commercially pure titanium or by the standard Ti-6Al-4V alloy.However, in the past the aerospace market has required the titanium industry to concentrate its developments onhigh-performance alloys. A great number of alloys were introduced for specific targeted applications andperformance goals and this will also be required in the new circumstances but with a different emphasis.

The primary concern of the end users in the aerospace market was performance and other attributes such ascost, although important, were usually a secondary consideration. This factor will not apply to industrialapplications. Alternatives on reducing costs include the increased use of commercially pure titanium, thedevelopment of low cost alloys and reductions in the cost of manufacture. Cost-sensitive new markets willrequire alloys developed with low cost rather than specific performance as the key driver.

The Japan Titanium Society has produced the following excellent figures on past production world-wide withtheir prediction for 1998.

53

Table 14 Production and shipments of titanium mill products world-wide (000s tonnes)

Area Prodn/Shipment DemandDom’ic Export Total Imports Domestic Aerospace%

1989Japan 3.8 5.0 8.8 0.2 4.0 12USA 21.1 3.9 25.0 1.2 22.3 80EC 5.0 - 5.0 6.0 11.0 60Total* 29.9 8.9 38.8 8.9 38.8 -

1990Japan 4.1 5.0 9.1 0.2 4.3USA 19.4 4.5 23.9 1.2 20.6EC 5.0 - 5.0 6.0 11.0Others - - - 2.1 2.1Total 28.5 9.5 38.0 9.3 38.0

1991Japan 3.9 4.0 7.9 0.2 4.2 12USA 12.3 3.3 15.6 0.9 13.2 78EC 4.5 - 4.5 4.5 9.0 60Others - - - 1.6 1.6 -Total 20.7 7.3 28.0 7.3 28.0 -1992Japan 3.4 3.1 6.5 0.2 3.6 12USA 13.6 2.4 16.0 0.4 14.0 77EC 4.0 - 4.0 3.5 7.5 58Others - - - 1.4 1.4 -Total 21.0 5.5 26.5 5.5 26.5 -

1993Japan 3.3 4.4 7.6 0.3 3.5 14USA 14.3 2.2 16.5 0.4 14.7 75EC 3.8 0.2 4.0 3.7 7.5 55Others - - - 2.4 2.4 -Total 21.4 6.8 28.1 6.8 28.1 -

1994Japan 4.2 4.4 8.6 0.7 4.9 14USA 13.5 3.0 16.5 0.3 13.8 75EC 4.2 0.3 4.5 3.2 7.4 55Others - - - 3.5 3.5 -Total 21.9 7.7 29.6 7.7 29.6 -

1995Japan 5.0 4.0 9.0 0.5 5.0 12USA 17.5 3.0 20.5 0.5 18.0 70EC 4.0 0.3 4.3 3.5 7.8 55Others** 7.5 7.5 15 - 7.5 -Total 34 14.8 48.8 - 38.3 -

1998Japan 5.3 4.0 9.3 0.5 5.8 10USA 14.0 4.0 18.0 1.0 15.0 65EC 4.5 0.5 5.0 4.0 8.5 50Others - - - 3.0 3.0 -Total 23.8 8.5 32.3 8.5 32.3 -

Figures for 1995 are estimates*Includes 1,500 tonnes in the "Other category for imports and 2,500 tonnes for domestic demand

54

** This now includes an element for China of 1,000 tonnes which is used within China, the remainder of the production isfrom the FSU. It should be noted that statistics from the FSU are both difficult and dubious.

The totals for years other than 1995 appear lower because JTS did not add in FSU or Chinese production. Anestimate has been made for this report based on the production of VSMPO. The JTS figures given above maybe an under-estimate for 1998 given the growth seen for 1995 and expected to continue through 1996. If theaircraft orders which are predicted for 1997 do materialise then growth to the end of the decade shouldcontinue. JTS sees the aerospace percentage in the USA for 1998 at 65% whilst the US industry wouldprobably place this nearer to 50%; the JTS is probably nearer the more correct estimate.

Given a US market for mill products in 1995 of 20,500 tonnes it would not be unreasonable to forecast asimilar figure for 1998 depending on the length of the "boom" period.. Indeed, if various initiatives are realisedthe figure could return to the 25,000 tonnes produced in 1989. The FSU is problematic and unpredictable.Production for 1995 is estimated at between 10-15,000 tonnes and is probably closer to the upper figure. If thehigher figure were taken for both the USA and FSU, the forecast production world-wide for mill products for1998 would be some 54,000 tonnes. This, excluding the FSU, is a return to the peaks of 1981 and 1989.

The sequence of titanium production begins with sponge as this, supplemented with scrap, still provides theinitial basis for mill product production. Current world (including FSU) production of sponge is some50,000tpa although the capacity level is between 100,00-150,000tpa. It is difficult to be more accurate onsponge capacity as the position of the FSU plant is uncertain with large quantities of plant which may not berealistically available. The Japan Titanium Society has estimated sponge capacity at 115,000tpa in 1994 whichis a reduction from the capacity of 173,000tpa available in 1984. For every 1.3 kg of sponge there is productionof 1kg of ingot giving an immediate reduction of available material. When turning this into milled productssuch as bar, billet, plate and sheet, there is further loss and then considerable loss when producing the finishedcomponents depending on the process involved although some will be recycled as scrap..

Ingot capacity for the US in 1994 was some 61,400 tonnes of which 6,000 tonnes was single melt (electronbeam and plasma) capacity. US consumption for 1994 was 27,000 tonnes and this has increased in 1995 to34,000 tonnes. World ingot production for 1995 is estimated at 40,000 tonnes compared to 34,000 tonnes in1994. This indicates that there is still considerable over-capacity, world-wide, both for sponge and ingot. TheFSU alone could probably supply most of the world requirements.

Ingots are produced from a mixture of titanium sponge and scrap with the US Bureau of Mines estimating thatscrap provided 53% of the feedstock for ingot production in 1994. European scrap is some 6,000tpa currentlyselling at between $3,750-4,500 per tonne. Some scrap is re-sold into the main titanium industry but at least30% is sold for ferro-titanium. Again, the position of the FSU is uncertain as the large stockpiles which weredumped on the world market in 1993 may have exhausted the supply.

The JTS reports that CP titanium in sheet or plate form is selling at some $20-30 per kg. There are reports thatthe FSU is positioning its price for the range of titanium materials at a figure slightly below that for Japan.

7.2 Market value

The value of the world market for titanium is problematic and the added value of the finished componentsmeans that inclusion of component value in the final figure would introduce too great an element of guesswork.However, 2 examples of the value-added nature of components has been given as an illustration. The followingestimates are offered as the basis for further discussion but it must be emphasised that they should be treatedwith considerable caution.

Working through the production chain the value of the titanium mineral concentrates industry, world-wide, issome $1,000 million pa although the greatest proportion of this is used in the pigment industry which has afinished value of some $4,200 million. The price of the minerals used in the production of titanium metal variesfrom $600 per tonne for the high grade "leucoxene" through some $70 per tonne for slightly altered ilmenite

55

containing about 54% titanium dioxide. Ilmenite with lower titanium dioxide content is normally only mined bycompanies that consume it in their own pigment plants and smelters.

If 20% of the minerals industry is assigned to titanium metal production this would indicate a value of $200million for the first item in the chain.

The next item in the chain is the production of titanium sponge which is currently selling at between $6-$6.50for on the free European market. The US price is over $8 per kilo except where Russian sponge is bought forre-export which avoids the anti-dumping duties. If the world sponge consumption is taken at about 50,000tonnes this would give a figure around $350 million-$400 million for the value of the sponge market.

General industry estimates indicate the 1.3 kg of sponge produces 1 kg of ingot which would indicate a worldproduction of ingot (excluding the FSU) of 40,000 tonnes. Ingot is priced at $6.00 to $6.50 per kilo for FSUingot on the Amsterdam free market which would suggest a value for the ingot market of at least $250 millionand probably closer to the sponge value.

In bar and billet the prices obviously vary depending on quality, grade and quantity but generally averagebetween $20 and $100 per kilo. Quotations include 10" round billet of Ti-6Al-4V for non-rotating applicationsat $22 per kilo although prices for 12" RCS would be down to $15.50 per kilo. Bar is quoted at $28.50 per kilofor 2" round Ti-6Al-4V although the price goes up to $110 per kilo for 0.25" diameter bar of Ti-6Al-4V. 2"round, rotating grade bar of Ti-6Al-4V would be priced at between $35-37.5 per kilo and 10" round rotatinggrade billet of Ti-6Al-4V would be priced at $24-26.5 per kilo. Commercially pure titanium e.g. grade CP30would be priced at $39.50 per kilo. Bar is estimated at 50% yield from ingot after vacuum melting andremoving contamination from surfaces which would indicate production of around 21,000 tonnes in theWestern world in 1995. The value of the market is therefore in the range $420 million and $2.3 billion. This istoo large a band-width and a more reasonable assessment would be between 10" round billet, non-rotatinggrade at $22 per kilo giving a world value of $462 million and 2" round rotating grade bar of Ti-6Al-4V givinga figure of $762 million.

This gives a figure for the world titanium industry up to the fabrication stage of well over $1,000 million. Thiswould accord with the estimate by the Japan Titanium Society that the value of the Japanese titanium industry is$500 million.

A final figure in the chain would be for commercially pure plate with a price around $31 per kilo althoughwhen dealing with the much thinner sheet the price will have risen to $200 per kilo for .020" sheet.

For comparison purposes, in 1952 commercially pure titanium sheet was selling for $20 per pound and Ti-150A billet was selling for $12 per pound. In 1984 Ti-6Al-4V billet used in low temperature compressor discswas $2.5 per pound, Ti-6Al-4V bar used in compressor blades was $4 per pound, Ti-6Al-4V sheet used inairframe structures was $10 per pound and plate of the same material also used in airframe structures was $4.5per pound. In the last 2 applications the prices for alternative materials were 50 US cents per pound.

Scrap cannot be disregarded in the value of the titanium market. New scrap metal recycled by the titaniumindustry was about 17,000 tonnes in 1994 and this sells for between $3,750 and $4,500 per tonne to give afigure of some $63.75 million and $76.5 million. This market is very vulnerable to FSU material either as scrapor as sponge.

The value of the market becomes even more complex after this stage. As an example, fabricators will buycommercially pure titanium plate from the mills at some $24,000 per tonne and that price has risen from afigure of around $18-19,000 per tonne early in 1995. That plate must be rolled into a cylinder and joined toform a tube with an add-on-value which is typically 50% of the cost of the material to give a finished cost ofsome $36,000 per tonne. With difficult materials this could rise to be twice the cost of the plate.

In a further example of the value-added potential of the material, titanium plate 2m x 3m 2mm and costing$1,500 is used to produce some 750 ophthalmology instruments weighing between 25-50 gm and selling at

56

between $120-200 per instrument. Thus material originally valued at $1,500 grows to an end product valuedbetween $90,000-150,000.

Competitor materials such as duplex steel would typically cost $12,000 per tonne but the price differential isreduced as steel is 40% heavier than titanium thus increasing the area produced from the same weight orreducing the weight of titanium required to produce the same area. This calculation thus reduces the equivalentcost of titanium to $15,000 per tonne with very similar fabrication costs. Although still more expensive thanduplex steel the titanium would be preferred in areas requiring its corrosion resistance or other qualities. Thereis no point in considering titanium (or its equivalent materials) for processes which do not require their abilities.

7.3 Forecast to year 2000

The following example is given as a warning on the dangers of prediction even by those with extensiveknowledge of the industry and is taken from a well-received paper presented at Titanium and SuperalloysConference, Washington, April 1984:

Japan titanium plants capacity 35,360 tons (Note US weights and measures)Japan operating rate 34%Japan titanium sponge production 13,040

US titanium plant capacity 35,360US operating rate 30%US titanium sponge production 10,660

UK titanium plant capacity 5,000 tonsUK operating rate 20%UK titanium sponge production 1,000

USSR titanium plant capacity (est) 60,000 tons (with a further 50,000 planned)

China titanium plant capacity (est ) 3,500 tons

Growth rates of 10% pa compounded over the next 10 years i.e. to 1994 were predicted although there werepredictions of 18% growth for European and Japanese industrial titanium product. The predicted use oftitanium in 1985 varied from 59,326 tonnes to 66,166 tonnes and that for 1990 varied between 79,810 tonnesand 93,500 tonnes. The author of the paper stated:

"As to the future price of titanium, in the long term it is clear that the price must come down to secure its placein the industrial market. More work will be necessary, however, and the current cost of production is generallyestimated to be around $4.70/lb at a 30% operating rate and between $3.50/lb and $4/lb at 80-90% operatingrate."

Obviously the growth rates did not occur and one reason is that the "Peace Dividend" could not be foreseenwith its resultant effect on defence spending. The optimistic growth rates quoted above have not occurred,Japanese sponge production has declined, UK sponge production has ceased and only 3 US companies remainalthough the current price for titanium sponge is now between $6-6.50 per kilo.

The recent (1995) increase in the aerospace market is predicted to continue through the next two years. Theresulting problem, which has been discussed at length through this report, is the ability of the titanium industryto achieve growth in non-aerospace applications while still continuing to service its single largest user. Theunder-investment of recent years, loss of sponge and production capacity, the nature of the material producedand uncertainty regarding FSU intentions require a degree of optimism to predict that current growth willcontinue even to the end of the decade; no boom in titanium’s history has lasted more than 2 years.

57

What is probable is that there will be a decrease in the number of companies producing titanium and thatEuropean companies are vulnerable to the larger US industry. In a global industry this is not necessarily aproblem and investment may come from larger companies within the industry. The involvement in theadvanced materials industry by large conglomerates such as BP and Pechiney has not been a success.

As previously noted, there is still considerable over-capacity both for sponge and ingot; the problem is toproduce titanium in a more cost-effective way and then sell the products to a wider market. All of this must bedone in a short period of time - time is not on the side of the industry - and against a history of under-investment over recent years. The position of the FSU is not known and cannot be predicted although there isevidence of a greater commercial approach amongst companies such as VSMPO.

At its peak in 1989 the titanium industry outside the FSU and China had a mill products production of some38,800 tonnes; the previous peak in 1981 was just over 34,000 tonnes which is the figure for 1994. There areindications that some of the very large increase 1994/5 has been the result of inventory re-stocking and oncecompleted will not feature in 1996/7. If new markets are not developed and/or prices reduced the "boom orbust" scenario will return as in each decade since the introduction of titanium. There are already considerableprice increases which show no signs of being reversed.

The problems with concentration on any single area for large scale titanium use is that those industries, likeaerospace, can introduce major cyclic changes. The Al-Taweelah desalination project in Abu Dhabi had amajor effect on Japanese manufacture. In 1992 it is estimated that Japanese manufacturers supplied some 1,300tonnes of tubular titanium of which 500 tonnes was exported. In 1993 production had risen to 2,000 tonnes ofwhich 50% was exported and of which some 400 tonnes was for the Abu Dhabi project. In 1993 titanium millproduct exports rose by 66% to 4,445 tonnes while total mill product despatches rose by 24% to 7,713 tonnes.The final deliveries were made in June 1994 but completion of the deliveries led to a fall in total mill product inJapan of 30% to just over 3,000 tonnes.

A similar effect had been seen in 1978-9 and 1980-1 when Japanese manufacturers had supplied 2,950 tonnesof titanium tubes to Al-Jubail I and Al-Jubail II desalination projects in Saudi Arabia. These projects coincidedwith an unprecedented growth in world-wide titanium demand largely resulting from US military and Europeancivil aircraft consumption. The market collapsed in 1981 but the price had risen considerably and plantcontractors then moved to cupro-nickel tubes which were cheaper. The Japanese titanium industry is nowconcentrating on the wider range of the consumer industries with considerable success.

The industry in 1995 has now returned to its position in 1981 and shows signs of regaining the position held in1989. In all that period, the industry has been repeatedly exhorted to widen its market base, concentrate onlowering its costs and prices, develop training and education programmes for design and technical staff anddevelop new, low-cost materials in conjunction with end users. With these developments the industry could seea plateau at, or even slightly exceeding, the 1989 figure of 38,500 tonnes excluding the FSU.

Essentially, the titanium industry is at a crossroads. If the umbilical link to the aerospace industry continues, thecurrent "boom" will, as in previous decades, be shortly followed by a "bust"; most booms have only lastedbetween 2-3 years and this one is now a year into its cycle which would indicate that by 1998 the industry willagain be in depression. Statements by US companies that a 70:30 ration aerospace:industrial will be changedwith 2 years to a 50:50 ratio are considered to be unrealistic - industrial developments will take up to 10 yearsand cannot be achieved in the current timescales.

58

8 Company Information

Titania SpA

Titania SpA produces and trade in commercially pure titanium semi-finished products from plates to longpieces and tubes which are sold world-wide. Sales of flat products have grown from 100 tonnes in 1991,through 400 t in 1992, 1,000 in 1993, 1,350 in 1994, 1,600 in 1995 and a forecast 2,000 in 1996. In 1991 theyclaimed 2.8% share of the European market for flat CP products and they forecast that this will rise to 32.3% in1996 (1995 is 26.7%). The company has achieved a reputation as a re-roller of titanium supplied by the Russianmanufacturers.

Titania was founded in 1989 because of the need a its parent company, ILVA to diversify and invest inadvanced materials. The company is now owned 75% by Krupp AG (who also have an interest in Deutsche-Titan) with the Italian entrepreneur Agarini holding a further 25%.

The headquarters of the company are in Milan, which also houses much of the Italian industrial base withproduction at Terni. The Terni plant was originally used for hot and cold rolling of stainless steel andconsiderable investment has been made, particularly in the hot rolling mill. A quarter reversible rolling mill isdevoted only to the production of titanium plates and there is also a wet grinding line. Titania has a partnershipwith several service centres for non-standard cutting and for special finishes such as sandpapering and brushing.

In 1992 Titania created Centro Sviluppo Applicazioni Titanio to develop new uses and applications fortitanium. The major stockholder is Titania (65%) with the balance held by the Vils Institute, Moscow (aRussian institute in the field of light metals), Centro Sviluppo Materiali (an Italian research centre) andTecnocentro, an engineering company. The Centre is responsible for basic and applied research, thedevelopment of new applications for titanium and technological improvements in the production and qualitydepartments.

The company is a member of the International Titanium Association in the USA and the Japan TitaniumSociety.

Verkhnyaya Salda Metallurgical Production Association (VSMPO)

VSMPO was built in 1933 not far from Moscow to produce aluminium and magnesium alloys and became thesole supplier of light alloy products for the Soviet aircraft industry. In 1941 as the German army nearedMoscow the plant was evacuated to the Urals to a military production area with strong security. Following theSecond World War and the development of titanium the plant was turned to the production of titanium alloysfor jet aircraft, commencing operations in 1957.

Research and production concentrated on titanium and aluminium-based alloy parts for domestic aircraftengines along with critical components parts, airframes and landing gear for such aircraft and helicopters as theIlyushin-86, Tupolev-204, Tupolev-160, MiG-29 and MiG-26.

The company is now listed as a Public Listed Joint Stock company with the control package of shares owned bythe company employees and has entered the market as a major exported of titanium metal and alloys. Thelargest volumes were produced in 1989/90 and represented between 50-70% of the titanium volumes meltedworld-wide. The company produces titanium alloys, semi-finished products, extruded items in aluminiumalloys, flat rolled stainless steel products, nickel-based high temperature alloys and solders.

VSMPO has enormous production capacity and can cover the entire product range from ingot to semi-finishedproduct with some finished product. Export rates are gradually increasing and reached a record level of 3,800tonnes of titanium in 1984 which doubled the 1993 volumes. In the first half of 1995 contracts were signed for4,000 tonnes and this increased to 5,000 tonnes by the end of the year.

59

Commercially pure titanium, and Ti-6Al-4V form the bulk of the exports from VSMPO but the company hasnow started to export other alloys including Ti-10Al-3V-2Fe, Ti-6Al-2Sn-4Zr-2Mo and Ti-15V-3Al-3Cr-3Sn.Delivery lead time in September 1995 averaged between 2 months and 4 months. The range of exports includes500-1,000mm diameter ingot in any alloy melted to any standard with slab, billet, extruded shapes, 10-300mmdiameter rolled and forged bar, sheet, plate, die forgings and forgings.

The separation from Western titanium producers has lead the company to develop original techniques andprocesses for critical applications in aerospace and submarines. The company strategy is to supply ingots, barand flat products to titanium producers who convert them into finished products. This runs in parallel with workwith end users to whom they offer semi-finished and finished products.

VSMPO has a melting shop with 47 furnaces and a further 40 furnaces at a separate location. The meltingprocess is vacuum arc remelting of ingot electrodes that are produced by interim melting from pressedelectrode. Ingots from titanium alloys are produced by double and triple remelting in vacuum arc furnaces andcan be 420mm-1,000mm in diameter, 1,000mm-4,0000mm long with a mass up to 10 tonnes. The companyclaims to have the largest die forging press in the world at 75,000 tonnes and a new 6,000 tonne forging pressdedicated solely to titanium.

Titanium International Ltd

Titanium International was established in 1970 by Fred Freund as a stockholder for the titanium industry. Thecompany was the UK stockist and distributor for RMI Company, Niles, Ohio who are the Western world’ssecond largest titanium producer. However, RMI pulled out of the arrangement at the beginning of 1995 andestablished their own subsidiary. Throughout the 1970s the company had excellent sales growth based on theaerospace industry and is now the UK’s prime supplier of Ti-6Al-4V alloy sheet. Growth in the 1970s was some25% pa with turnover in 1989 of £10.5 million and a staff of 60..

A particular development which has involved the company is the application of creep and superplastic formingin the aerospace industry. The company has been audited and approved by both BSI and the Civil AviationAuthority as have RMI in the USA and is a member of the Society of British Aerospace Companies. Thecompany has worked on many aerospace programmes including Concorde, Airbus A300, Airbus A310, AirbusA320, Airbus A330 and 340, Trident, Boeing 747 and Harrier.

In addition to the aerospace industry the company has been heavily involved in the industrial sector and muchof their stock holding is for this purpose. Stocks include wire, bar in various cross sections, billet, sheet, plate,tube, pipe and pipe fittings. Simple forgings of rings, discs, and blocks are also held. The company stocks awide range of titanium grades and alloys from the commercially pure grades 1 to 4 through the standard alloyTi-6Al-4V to the titanium aluminides. The company is the second largest manufacturer of titanium metal semisin the UK - after IMI - marketing a range of semis including bar and rod products and billets.

Accurate cutting to size is a particular speciality and the company has automatic feed bandsaws, mechanicalhacksaws and guillotines with a 3 metre cut which can take plate to a maximum of 12.7mm.

In February 1992 the company was sold by its then owners, Cookson plc, and became a wholly ownedsubsidiary of Titanium Industries Inc. of New Jersey, USA which is the distribution arm of OregonMetallurgical Corporation (Oremet)

Bunting Titanium Ltd

Bunting Titanium Ltd was founded as a fabricator in 1964 when titanium was an exotic metal. They initiallymanufactured titanium anodising jigs and anode baskets for the metal finishing industry. Although they havesupplied components for ocean racing yachts, jewellery and for go-carts, the main business has been the supplyof process equipment to the chemical, petrochemical, nuclear and offshore markets. This latter applications hasbeen a particular interest for Bunting who claim to have been the first fabricator to commercially exploit thepotential for titanium in the offshore market. As early as 1978 the company was involved in the provision of

60

chemical injection lines of small bore titanium piping and valves to major oil companies such as Shell on theBrent Field, Chevron on the Ninian Field and BP on Forties Field.

The company has a strong interest in training in the use of titanium and in working with end users. Welderswere sent to the Ekofisk field, off Norway for Phillips Petroleum to install chemical injection lines. Otherprojects have included the replacement of ballast water pipes by Mobil in 1986/7 for their Statfjord A andBeryl A platforms. Bunting note that titanium was chosen for this project in preference to stainless steelcompeting on price, installation costs and delivery.

The long term nature of the development of offshore markets is seen in the Hibernia Project, Newfoundland,Canada where the plan for the platform, in which titanium would be used for ballast water duty, was approvedin 1986. However, the contract was not awarded until 1990 when Bunting was already separately involved withdiscussions with Wimpey who were also involved in the Hibernia project. The company have had 3 substantialcontracts for this project between 1992-5. The contracts included the supply of pipe penetrations in 30" and 36"diameter, very large diameters for titanium pipes, ball valves, fish grids and ballast flanges. Working withNewfoundland fabricators, welders were trained to ASME standards and Bunting sees further potential in theNorth American market.

In January 1992 the company was the subject of a management buy-out following which titanium pipes becamethe main focus of the business. The company employs 37 people and had a turnover of some £2.5 million in1994; about 50% of production is exported to such countries as Korea, Australia, New Zealand, China,Singapore, South Africa, India, Pakistan and Eastern and Western Europe.

The company is a founder member of the Titanium Information Group in the UK and is particularly keen toestablish links with Eastern Europe have taken a license for the welding process developed at the PatonInstitute, Kiev.

Titanium Metals Corporation (Timet)

Timet is an integrated titanium producer of titanium sponge, ingot and forged, rolled and flat products producedfrom ingot and/or slab. Timet is certainly the largest integrated producer in the USA and probably in the world(the position of the FSU is uncertain). The company's titanium products are used in a wide variety ofcommercial and industrial applications and Timet probably holds about 33% of the US market. Timet is theonly fully integrated mill products producer which processes rutile ore into titanium tetrachloride.

In the last 3 years over 90% of the company's sales have been generated from the sale of titanium ingot andwrought products with the balance from sales of titanium tetrachloride, sponge and by-products. Timetestimates that its 1994 production accounted for the equivalent of 60% of the total titanium sponge produced inthe USA and approximately 25% of the world production excluding the FSU. In 1994 over 60% of sales wereto customers in North America with 25% to European customers and the balance to other regions. The majorityof sales in 1994 were to customers in the aerospace industry and this should continue for 1995 although thecompany believes that industrial applications will occupy a larger proportion of sales in the future largelybecause of the decrease in military aircraft spending; commercial aircraft are still seen as a major market.Particular industrial targets include industrial power plants, pollution control equipment, offshore oilinstallation, automotive, medical implants and sports equipment.

The 5 largest customers of the company accounted for 20-25% of sales in each of the last 3 years with thelargest customer accounting for less than 10% of sales.

Timet is owned by the Tremont Corporation, a holding company, whose chairman and president has recentlytaken over the position of president and chief executive for Timet following the departure of the previouschairman who had been in post since 1989. The industry sees the new post as being required to revitalise themanufacturing and customer service operations at Timet and restore company profits. From 1991 through to themiddle of 1995 the 3 major US producers suffered substantial losses of which Timet's was the largest at $170million. These losses resulted from the downturn in the military aerospace industry, the flood of cheap titanium

61

from the FSU and a world recession. They were also exacerbated by a 9 month strike at the sponge operation atHenderson, Nevada from October 1993 to July 1994 and a 3 month strike at the rolling and finishing operationat Toronto, Ohio which ended in October 1994. A new labour agreement negotiated as a result of the first strikeexpires in October 1996. The company employed some 860 persons in 31 December 1994, a decrease from the1,050 in December 1993 and that number will have further declined. There are also some 20 staff employed inthe European operations.

Tremont is also reported to be concerned at greater accountability over the $20 million working capital which itis making in Timet.. The company accounts for 1994 claim that Timet accounts for between 20%-40% of theUS shipments of mill products and sales in 1994 were $146 million. The company made a loss of $44 millionin 1994 and expects to reduce this to a loss of $15 million for 1995 with a small net profit for 1996.

Industry reports indicate that Timet is concerned to pursue a more profitable business by narrowing its focusand to lose market share in unprofitable markets; this indicates that although the company will still be the mainUS producer it will be by a narrower margin than in previous years. The indications are that the company willcontinue to focus on the specialised value-added products that deliver high profit margins at the expense of thelow grade products. Specific areas which the company aim to improve include deliver performance, yields andcycle times. Metallurgical mistakes in the high value products have lead to late deliveries and mountingbacklogs.

The company has executed a series of agreements with Cezus, France, IMI Ltd, UK, and Japanesemanufacturers which are covered in Chapter 9. Timet’s sales of Cezus products in 1994 were worth $20million. In addition to these arrangements Timet and Axel Johnson Metals Inc. have a joint venture THT whichwas established in August 1992. THT owns and operates a cold hearth melting furnace with an annual capacityof 12 million pounds which is believed to have the largest capacity of any cold hearth titanium melter in theworld.

Timet has Vacuum Distillation Process (VDP) sponge capacity of 22 million pounds at Henderson, Nevadawhich commenced start-up in 1993. The plant operated at less than half capacity during 1994 due to mechanicaldifficulties although improvements have increased production to 75% of capacity in 1995. The older Krollprocess sponge plant with capacity of 32 million pounds was closed in 1994 and will remain closed untilmarket conditions improve. Timet also has 13,600 tonnes ingot capacity which is smaller than the 16,300 tonneingot capacity at RMI. Wrought products are produced at Timet’s forging and rolling facility in Toronto, Ohioand at its finishing facility in Morristown, Tennessee. These plants operated at between 40-50% capacity during1993-4.

Japan Titanium Society

The Japan Titanium Society was formed in 1952 as an official corporation authorised by the Japanesegovernment with the aim of contributing to the progress and development of the titanium industry. From thebeginning the impetus was on development of industrial rather than aerospace applications for titanium whichlead to an emphasis on economics and cost.

The Japan Titanium Society has 24 regular member and 70 associate members who are titanium producers,distributors and fabricators of finished products.

The current Chairman is Tadashi Moriyasu who is the Executive Vice-president of Kobe Steel, a previousChairman was with Sumitomo.

In 1991 JTS formed a Joint Task Force with the US International Titanium Association to develop industrialapplications for titanium beyond national boundaries. The Task Force was joined by the FSU TitaniumAssociation in 1994. Companies in other countries are members of the JTS including Titania SpA in Italy.

62

JTS has taken the lead in collecting and publishing industry statistics for titanium and has attempted toencourage similar publication for other geographic areas. The Society has also attempted to encourage aninternational approach to standards for the industry.

8.1 General information

Titanium Metals Corporation (Timet), USA which is 75% owned by the US Tremont Corporation is to mergewith IMI Titanium, UK to form the largest titanium company in the market. Under the deal IMI would transfer allits titanium interests to Timet in exchange for shares in the new company. The new Timet would be 45% ownedby Tremont Corporation, 45% owned by IMI and 15% by Union Titanium Sponge. The Japanese have a smallstake in the new company. However, Timet already has an agreement with Pechiney, France to buy CieEuropeene de Zirconium Cezus over 2 years which would leave only Deutsche Titan, Germany and Titania SpA,Italy as European titanium producers - both much smaller than IMI. Industry reports indicate that the Timetarrangement on Cezus may not continue but as Pechiney is committed to divesting itself of the company thiswould imply finding another buyer.

There are also reports that both Titania SpA and Deutsche Titan GmbH are to be sold with one option being amerger between the two companies although Deutsche Titan report that there are other possibilities.

The three US titanium producers reported improved financial results with both RMI and Timet returning toprofitability in the third quarter of 1995. Timet report an operating income of $2.3 million compared to anoperating loss of $10.8 million in the same period in 1994. Sales were up from $32.4 million in the third quarterof 1994 to $47.9 million in the third quarter of 1995.

RMI pulled out of titanium sponge production in 1993 and made a small operating profit of $0.2 million for thethird quarter of 1995 although it is still losing money at the corporate level. RMI had suffered financially fromthe failure of its joint venture with Permascand, part of the Akzo Nobel group, in Glomfjord Norway, Permipipewhich was established to develop markets for titanium in the offshore oil industry and failed within a yearresulting in write-down charges of $8.4 million.

Oremet, USA produced a small loss for the third quarter of 1995 which the company said resulted from acombination of increased raw material costs, production inefficiencies and an unfavourable mix of low-marginaerospace shipments. Increases in the price of titanium scrap over the last 12 months have meant that titaniummanufacturers must use more expensive raw materials rather than turning and chips which are not available in thequantities required.

Timet have a 10 million lb pa acid leach sponge plant in mothballs in Nevada and currently (December 1995)have no plans to bring it back into production. However, it could be re-started to free up vacuum distillationproduction at its other plant for supplying IMI which currently uses Japanese sponge.

Midhani, India has a dedicated titanium plant consisting of a vacuum arc melting furnace for the production ofingots weighing up to 6.5 tonnes and a vacuum annealing furnace. For cold rolling it has a 4-high strip mill, a 6-high sheet mill, a 12-high strip mill and a 20-high foil mill. For hot-rolling it has 2-high, 2-stand and 3-high stripmills, a 3-high, 3-stand bar mill and a 7-stand wire rod mill. The wire drawing equipment can produce wire downto 0.02 mm diameter. It is thought that Midhani will concentrate on tube and wire for industrial applicationsrather than alloy materials for India’s aerospace industry.

In 1995 Spire Corporation was awarded a contract by the Naval Air Warfare Center for the continuedinvestigation of ion implantation as a procedure for improving the performance of titanium alloys used in aircraftengines. In this work the fretting resistance of ion implanted titanium alloy engine components will be evaluatedwith engine simulation tests and compared to untreated blades or blades which have been treated withconventional anti-galling coating.

63

In June 1995 Titanium Hearth Technologies, Exton, Penn acquired the titanium recycling facility of VikingMetallurgical, Nevada. The facility can melt more than 1,360 tpa of titanium. The acquisition of the facility willgive Titanium Hearth Technologies recycling and refining capacity of 91,000 tpa

In April 1995 RMI Titanium opened a UK service centre to undertake the work previously done by TitaniumInternational. RMI claims to have 60% of the world market for titanium billet and plate. The centre has beenopened partly in response to demands from industrial suppliers of a just-in-time approach to orders. IMI has astockholding company Stockpoint and it is thought that there could be a decrease in the number of theindependent titanium stockholders especially as titanium is only of minority interest for many of them.

Verkhnaya Salda Metallurgical Production (VSMPO) is the only Russian supplier of titanium alloy semis, andother materials including flat rolled stainless steel and nickel-based high temperature alloys. The companyemploys 14,000 people at its plant in Sverdlovsk which has a capacity of 100,000 tpa for all materials. Thecompany achieved ISO 9002 certification from TUV, Germany in August 1993 and is seeking certification fromforeign aerospace companies - a more stringent process than ISO certification.

Titanium Industries Inc., which bought Titanium International Ltd in the UK in 1992 was itself bought by Oremetin September 1994. Previous to that the company had been owned by Ahlstrom who decided to concentrate ontheir pulp and paper interest.

Crucible Materials Corporation has originally manufactured titanium but, partly due to the cyclical nature of theindustry, withdrew from titanium manufacture in 1989/90 and concentrate on the manufacture of gas atomisedtitanium alloy powders which are still in the pre-commercial stage.

1992 saw considerable changes to companies in the titanium industry including the closure of the RMI andDeeside Titanium sponge plants, the closure of ILMC, Ladish Pacific Division and Howmet’s Reno Division, thebankruptcy of Ginatta. In 1994 Wyman Gordon Wooster division was closed and the sponge plants at Zaporozye,Ukraine and SDK, Japan were closed. In 1995 IMI withdrew from the CP titanium business.

In February 1995 the Langley Forge PLC group in the UK acquired a majority shareholding in Bunting TitaniumLtd which has been a major promoter of the Titanium Information Group. The acquisition provided and injectionof management resource and money into Bunting with the opportunity of re-structuring.

64

9 Company directory

Aalco,(Ring Marketing in 1996)52 High Street, Kingston-on-Thames, KT1 1HN, UK44 181 549 6122/181 481 3301

Aerospace Forgings LtdChurchbridge, Oldbury,Warley,B69 2AU, UK44 121 552 2921/121 544 5731

Aguilar y Salas s.a.c. Santander 126, 08030 - Barcelona, SPAIN34 3313 1300/34 3313 6596

ALD Vacuum Technologies GmbH (formerly LeyboldDurferrit GmbH)Rueckinger strasse 12, D-63526 Erlensee, GERMANY49 6183 880/49 6183 883290

*Alloy Wire International (Angus Hogarth)Cradley Road, Cradley Heath,Warley, B64 7BP, UK44 1384 566775

Astro Metallurgical Inc3225 Lincoln Way West, PO Box 1229Wooster, OH 44691-1229, USA1 216 264 8639/1 216 263 4554

Aurora Forgings LtdMeadowhall Road, Wincobank, Sheffield, S9 1HD, UK44 114 261 5000/114 261 5019

AVISMABerezniki Titanium and Magnesium WorksPermskaya Oblast,Russian Federation, RUSSIA

*Balzers High Vacuum Ltd (Andy Lock)Bradbourne Drive, Milton Keynes, MK7 8AZ, UK01908 377277

*BC & Trading GmbHUrltalstrasse 37, Waidhofen, AUSTRIA 334043 7442 52589/7442 54616

Berezniki Titanium-Magnesium Integrated WorksSee AVISMA

Boeing Aerospace CompanyPO Box 3999, Seattle, WA 98124, USA1 206 773 2121

Bohler Schmiedetechnik GmbHPO Box 96, Kapfenberg, AUSTRIA 860543 862 20 6678/43 862 20 7570

*Bunting Titanium Ltd (Ray Portman, MD)34 Middlemore Industrial EstateSmethwick, Warley, B66 2EE, UK44 121 558 5814

*Cezus (Mr Soulie, Marketing)Tour Flat, 92084 Paris La Defense Cedex,FRANCE33 1 34 41 63 64

*Avenue Paul Girod (Mr Odidier, Plant Manager)Ugine, FRANCE 7340033 7989 3800/33 7989 3809

*Charles Rivers Associates Inc (Firoze Katrak)200 Clarendon StreetJohn Hancock Tower T-33, Boston MA 0213 USA61 617 425 3000/1 617 425 3132

Cometals IncOne Penn Plaza, New York, NY 10119, USA1 212 760 1200, 1 212 564 7915

Consarc Corporation (Vacuum melting)100 Indel Avenue, PO Box 156Rancocus, NJ 08073, USA1 609 267 8000/1 609 267 1366

Crucible Materials Corp (Joanne Beckman, Fred Yalton) POBox 88, Pittsburgh, PA 15230, USA1 412 923 2955

*Derek Raphael & Co Ltd (Guy Derby)18 Spring Street, London W2 3RA, UK44 171 486 9931/ 44 171 935 0179

*Deutsche Titan (H Jost)104 Alterdorferstrasse, 45143 Essen, GERMANY49 201 188 2245

Duriron Company - Titanium Casting GroupBox 1145, Dayton, OH 45401, USA1 513 226 4523/1 513 226 4276

Dynamet Inc195 Museum Road, Washington, PA 15301, USA1 412 228 1000/1 412 228 2087

65

*Dynamet Technology (Stanley Abkowitz)Eight A Street Burlington MA 01803, USA1 617 272 5967/1 617 229 4879

Dynamic Materials Corporation (EFI Division)551 Aspen Ridge Drive, Lafayetteville, CO 80026, USA1 303 665 5700/1 303 604 1893

Ets. Charles Brami65-73 rue Salvador-Allende, 95870 Bezons, FRANCE33 1 39 47 97 65/ 39 69 41 75/ 39 61 18 38

*Galt Alloys Inc (Jim Hayden, VP Sales)122 Central Plaza North, Canton, OH 44702 USA1 216 456 9929

Frankel Metal Company19300 Filer Avenue, Detroit, MI 48234, USA1 313 366 5300/1 313 366 5305

Harald Pihl ABBox 4134, S181 04 Lidingo, SWEDEN46 8 731 56 00/46 8731 0540 and 46 8 731 05 45

Harvey Titanium Ltd1805 Colorado Avenue, Santa Monica, CA 90404, USA1 310 829 0021/1 310 829 7248

Howmet Corporation - Titanium Ingot555 Benston Road, Whitehall, MI 49461-1899, USA1 616 894 7183/1 616 894 7354

Icarus SAParc Industriel des Hauts SartsRue de Hermee 245, B-4040 Herstal, BELGIUM32 41 40 01 01/32 41 40 06 40

*IEP Airfoils (Part of the Inco Group) (Stuart Clapham)Monk BridgePO Box 108, Whitehall Road, Leeds LS1 1PE, UK44 113 2446262/44 113 2435191

IMI Titanium Ltd (Andrew Bacon Sales & MarketingDirector), (Tony Barber, Technical Director)PO Box 704, Witton, Birmingham, B6 7UR, UK44 121 356 1155

IMI Titanium Ltd (Titanium rod)PO Box 57, Waumartwydd, Swansea, SA1 1XD, UK

IMI Titanium Inc150 Queen Avenue S.W.PO Box 908, Albany, OR 97321-0336, USA1 503 926 7711/1 503 967 7786

Inco Engineered Products Ltd28-30 Derby Road, Melbourne, DE73 1FE, UK44 1332 864900/1332 864888

Institute for Materials and Advanced Processes(Prof Sam Froes), University of IdahoMoscow, ID 83843-4195, USA

*International Titanium Association (John Monsees, Exec Director)4141 Arapahoe Ave Ste 100, Boulder, CO 80303, USA1 303 443 7515/1 303 443 4406

*IRC in Materials for High Performance Applications, (DrPaul Blenkinsop)University of Birmingham, Birmingham B15 2TT, UK44 121 414 3344(Formerly with IMI Titanium and organised the TitaniumConference, Birmingham, October 1995)

*Japan Titanium Society (Mr Kiraoko, Exec. Director)4th Floor, Daishin Bdg9-2-chome, Kanda Nishiki ChoChiyoda-ku, Tokyo 101, JAPAN81 3 3295 5958/81 3 3293 6187

*Joint Replacement Instrumentation Ltd(Brian Jones)104-112 Marylebone Lane, London W1M 5PU, UK44 171 580 5634/171 224 2862

*JRI Manufacturing Ltd117 Leigh StreetAttercliffe Common, Sheffield, S9 2PS, UK44 1142 446758

*Keywell (UK) Ltd (Titanium scrap)Holbrook Industrial Estate HalfwaySheffield S19 5GZ, UK44 114 483213

Kobe Steel LtdTekko Bdg., 8-2 Marunouchi-1-chomeChiyoda-ku, Tokyo 100, JAPAN81 3 3218 7792/81 3 3218 6592

Metal Export (Bernd Hilgenberg) *Micra Instruments Ltd (Kevin Spittall)

66

PO Box 160123, D-42830 Remscheid, GERMANY49 2191 74021/49 2191 790450

52 Bilton Way, Luton, LU1 1UU, UK44 1582 487104/1582 486300

Mishra Dhatu Nigam (Midhani) LtdHyderabad, INDIA

Mikuni Corp.Kuno, Odawara, Kanagawa-ken, 250 JAPAN

*National Physical Laboratory(Dr Stuart Saunders; John Sillwood), Teddington, UK44 181 977 3222

Nippon Kokan KK (NKK)1-2, 1 chome, Marunouchi,Chiyoda-ku, Tokyo 100, JAPAN81 3 3212 7111/81 3 3222 2816

Nippon Steel (Shin Nippon Seitetsu)6-3 Ohtemachi 2-chomeChiyoda-ku, Tokyo 100, JAPAN81 3 3242 4111/81 3 3275 5611

*Oregon Metallurgical Corporation (Oremet)( David Floyd, VP Commercial)530, 34th Avenue, S.W., PO Box 580Albany, OR 97321, USA1 541 967 9000/1 541 917 0656

Osaka Titanium Co Ltdnow Sumitomo Sitix Corp., JAPAN

Permascand A/S (part of Akzo Nobel)PO Box 1868, Nordnes, N-5024 Bergen, NORWAY47 55 90 05 40/47 55 90 15 52

Pioneer Metals and Technology Inc60 State Street, 30th Floor, Boston, MA 02109, USA1 617 742 7825/1 617 422 4286(High purity metal powders made in Moscow)

President Titanium243 Franklin Street (RT 27), Hanson, MA 02341, USA1 617 294 0000/1 617 293 3753

Renton Coil Spring CompanyRenton, WA, USA1 206 255 1453

Ribbon Technology CorporationGahanna, OH, USA1 614 864 5444

*RMI Titanium Co Inc (Crystal Rebec, John Odle)1000 Warren Avenue, Niles, OH 44446, USA1 216 544 7633

RMI Titanium (David Hall)Fazeley, Tamworth, UK44 1827 262601

*Rolls Laval Heat Exchangers Ltd (Hugo Ferguson)PO Box 100, Wolverhampton, WV4 6JY, UK44 1902 353353

Sandvik Steel (Conny Palmer, Marketing Manager)S-811-81 Sandviken, SWEDEN46 26 263741/46 26 272020

Showa Denko (Have left the titanium sponge market)1-13-9 Shiba-Daimon, Minato-ku, Tokyo 105, JAPAN81 3 5470 3111/81 3 3431 6442

*SINTEF Structures and Concrete (Prof. Stig Berge)N-7034 Trondheim, NORWAY47 7359 5545/47 7359 266

Sulzer Brothers LtdWinterthur, SWITZERLAND

Sumitomo Sitix Corporation1 Higashihama, Amagasaki, Hyogo 660, JAPAN81 6 411 1121/81 6 414 2021

Tecvac (Titanium nitride coatings)Stow-cum-Quy, Cambridge, CB5 9AB, UK44 223 811 870/223 811258

*Teledyne Allvac IncPO Box 5030, Monroe, NC 28111-5030, USA1 704 289 4511/1 704 289 4018

Teledyne Wah ChangPO Box 460, Albany, OR 97321, USA1 503 967 6977,1 503 967 6994

Textron Lycoming550 Main Street, Stratford, CT 06497, USA1 203 385 2000

Textron Aerospace Development Center850 Ladd Roa, Walled Lake, MI 48088, USA

Thornton Precision Forgings LtdLowther Road, Sheffield, S6 2DR, UK

67

1 313 624 7800 01742 855881

*Timet UK Ltd (David Peacock)17 Woodford Trading EstateSouthend Road, Woodford Green, Essex IG8 8HF, UK44 181 498 8000/181 551 6550

Tinimet Halbzeug GmbHLehmkuhlenweg 19D-41065 Monchengladbach, GERMNAY49 21 61 600 33/49 21 61 600 37

Titan-Aluminium-Feinguss GmbHBestwig, GERMANY49 29 04 98 10

*Titania SpA (Ezio Debernardi)Via Carducci 5520099 Sesto San Giovanni (Milan), ITALY39 2 6610 4251/ 39 2 643 8571

Titanium Association (Prof. N.F. Anoshkin)All-Russia Institute of Light Metals (VILS)Moscow Region, Moscow, RUSSIA7 095 448 67 05/7 095 446 18 01

Titanium and Alloys Corporation21601-A, Hoover Road, Warren, MI 48089, UK1 810 755 1900/1 810 755 5109

Titanium Development Associationnow International Titanium Association

Titanium Hearth Technologies Inc215 Welsh Pool Road, Exton, PA 19341, USA1 610 363 0330/1 610 524 1567

Titanium Industries Inc(See Titanium International Ltd), Fairfield, NJ USA

*Titanium Information Group (David Peacock)44 1923 269564 (UK)

*Titanium International Ltd (Tony Lawrence - MD)Keys House, Granby AvenueGarretts Green, Birmingham, B33 0SP, UK44 121 789 8030/121 784 8054

*Titanium Metals Corporation (Timet) (J. Monaghan)1999 Broadway, Suite 4300, Denver, CO 80202, USA1 303 296 5600/1 303 296 5640

Timet (manufacturing plant)Henderson, Nevada, USA1 702 564 2514

*Titanium Products Inc (Larry E LaVoie)890 N Main Street, Independence, OR 97351, USA1 503 838 2898/1 503 838 2910

*Titanium Technology Forum, (Hilde B Nordvik)Institute for Energy TechnologiesPO Box 40, N-2007 Kjeller, NORWAY47 6380 6369, 47 6380 6258

*Titanium World (Sjef Roymans, Ed.)PO Box 3967200 AJ Zutphen, NETHERLANDS31 575 511011/31 575 511099

Toho Titanium Company Ltd (Mr Tadokoro, MD)2-13-3 1, Kohnan, Minato-ku, Tokyo 108, JAPAN81 3 3458 4400/81 3 3458 4431

Torresin Titanio-Metalli s.r.l. (Titanium stockholder)Via A Doria 17, 1-20124 Milano, ITALY39 2 6693465/39 2 66986053

TWI (PL Threadgill)Abington Hall, Abington, Cambridge, CB1 6AL, UK

Ulbrich Stainless Steels & Special Metals Inc57 Dodge Avenue, North Haven, CT 06473, USA1 203 239 4481/1 203 243 1676

*US Bureau of Mines, Div. of Mineral Commodities (JosephGambogi), Washington, DC 20241-0002, USA1 202 501 9390/1 202 501 3751

Universal Energy Systems (Dr Y-W Kim)4401 Dayton-Xenia Road, Dayton, OH 45432, USA1 513 255 1321/1 513 255 3007

Ust Kamenogorsk Titanium and Magnesium WorksUst Kamenogorsk,Vostochno-Kazakhstanskaya OblastKAZAKHSTAN

VSEL Manufacturing Ltd (R. Lomas, Project Eng.)Barrow-in-Furness,Cumbria, LA14 1AF, UK44 1229 823366

*Verkhnaya Salda Metallurgica Production Assoc.(VSMPO) (V.V. Tetyukhin, MD)

Zaporozhye Titanium & Magnesium WorksZaporozhye, UKRAINE

68

1 Parkovaya ulVerkhnaya Salda, Sverdlovsk region, RUSSIA 6246007 34 345 23832/7 34 345 24736

(Titanium sponge plant closed in 1994)