<article><p class="lead">North American ferro-titanium prices rose sharply after nearly half a year of little change on expectations of less availability of imported alloy and concerns about the domestic scrap supply moving forward as the Ukraine conflict intensified.</p><p>North American ferro-titanium (70pc) prices jumped by 56pc to $5.20-5.75/lb on 3 March from the prior week as consumers entered the spot market to much higher offers to secure volumes for the near term.</p><p>Truckloads of alloy changed hands at the beginning of the week ended 4 March at $4.00/lb before climbing to the $4.65-4.85/lb range and ending the week with purchases at $5.20/lb and $5.75/lb. Market participants have since noted sales above the $7.00/lb mark in the most recent week, but the details could not be confirmed. </p><p>European ferro-titanium producers and traders hiked offers for alloy as sanctions were placed on Russian financial institutions and major ocean freight companies announced the cessation of bookings to and from Russian ports because of Russia's invasion of Ukraine. Typically, Russian-origin alloy trades at a discount in the European spot market, which usually limits the upside of western-grade alloy offers.</p><p>This has trickled down to North American sellers, who compete with UK, Ukrainian, and Russian-origin alloy under normal circumstances. Higher prices in Europe and limited access to both Russian and Ukrainian alloy, which make up more than 50pc of North American imports, has stifled competitive pressure on local alloy offers.</p><p>Market participants in North America also expect a greater reliance on scrap from the US as European ferro-titanium producers attempt to ramp up capacity and make up for the loss of Russian and Ukrainian alloy, limiting exports of European scrap to the US. </p><p>Supply chain bottlenecks in the automotive industry hampered alloy demand for the better part of 2021, which halted sharp price increases that began in the fourth quarter of 2020. </p><p>Tight feedstock supplies limited downward pressure on prices, but tepid spot demand prevented further price hikes. For nearly five months, standard grade alloy traded in the range of $3.40-3.60/lb in North America.</p><p>Because of increased aerospace demand, processors have been less willing to downgrade aero-quality scrap to serve the ferro-titanium market, not only increasing total demand but also raising the possible price point within the more stringent scrap quality aerospace market. </p><p>Now, new supply-side issues could further bolster prices even as demand remains relatively unchanged in North America, especially as titanium alloy demand has begun to pick up and melters compete for scrap.</p><p>The last time ferro-titanium prices surpassed the $5.00/lb threshold was in September 2004. They then moved higher to a peak of $15.75/lb in 2005 before falling back below $5.00/lb in 2007.</p><p><i>By Nicholas Bell</i></p></article>
