Titanium market conjuncture
If we analyze the price dynamics, then we can conclude that world prices for the main raw materials for titanium production are steadily declining since 2001, which contradicts the tendency of the 2003 price growth for all other metals of their ores and concentrates. This is inexplicable from an economic point of view and can not last long. At the end of last year, ferrotitanium and titanium scrap sharply increased in price, which will set a new titanium market conjuncture. According to experts' estimates, the aviation industry has been developing at a rapid pace, production of steel with titanium micro-alloying has increased rapidly.
According to forecasts, AVISMA and VSMPO figures for this year will clearly be better than the previous one.
It is expected that at the end of this year these technological and organizational production will merge. On March 27, 2004, a meeting of the Board of Directors of OJSC VSMPO was held, at which they discussed the possibilities of merger between AVISMA and VSMPO. The result was a decision on the need to create a working group, which includes specialists from both enterprises and external consultants, their main task is to develop an action plan for the merger of the two companies.
Some analysts believe that this process may be hampered by Viktor Vekselberg’s Renova, which controls SUAL, as well as more than 12% of VSMPO shares, this data is not yet confirmed. «SUAL» itself is interested in promoting its own products of KUZOTSM rolling in the world market. In addition to SP Uniti with American Boeing (Allegheny Technologies), the company controls the American titanium producer — National Forge & Machining and plans to acquire an enterprise that specializes in the smelting of titanium (presumably Lowrance Aviation or Pamona Melting). Once again, we note that capacity in the US allows VSMPO to bypass the restrictions on the supply of products to the US arms production of the country.
But the decline in profitability of production does not stop VSMPO. The company decided to realize its credibility through invests, it plans to place about 20% of shares in the form of ADR on the stock markets of Russia and America. Analysts believe that the assets of the company are too undervalued, nevertheless the profit from this is projected to be about $ 500 million. In the distant future, public offerings of shares scheduled for next year are planned to make the company more understandable and transparent for investors. This is encouraging, because today’s activity of the non-ferrous metals industry remains something beyond the clouds.
On May 24−27, 2004, the «Titan-2004 in the CIS» conference took place on the ship «St. Petersburg». Information about it can be found on the website: titan-association.com
Topics covered at the conference:
— titanium market in the world and CIS countries;
— program for the development of the industry;
— trends in the development of raw materials and sponge production;
— achievement in metallurgy and metallurgy of titanium;
— dynamics of development of the main spheres of titanium applications;
— the use of titanium in medicine, energy, consumer goods;
— reviews of titanium waste and ferrotitanium markets.