Specialty alloys producer ATI shipped fewer titanium products in the latest quarter, describing softness in demand for titanium-intensive aerospace structures as original equipment manufacturers (OEM) continue to reduce inventories that built up over the past year.
Sales of titanium and titanium-based alloys accounted for 17pc of the Texas-based company's revenue in the second quarter, down from 20pc in the prior-year period, ATI said in reporting its second-quarter earnings on Thursday.
Commercial airframe sales dropped by 7pc to $195mn in the same timeframe, reflecting "continued near-term destocking activity" by Boeing and Airbus after the aerospace manufacturers bought ahead on expectations of higher build rates last year. ATI anticipates that trend will persist before deliveries recover some time in 2026.
Still, ATI anticipates demand to pick up during the fourth quarter for certain products for which supply is tighter, including billets and alloys for landing gears, as both airframers ramp up production of their widebody aircraft programs. Boeing, for instance, increased output of its 787 Dreamliner to 7/month from 5/month during the latest quarter.
ATI expects by year end to finish qualifying titanium produced from its new electron-beam (EB) furnace at its melting facility in Richland, Washington. Those certifications would be for standard-quality (SQ) applications, while the company plans to begin the approval process for premium-quality (PQ) uses in the second half of 2025.
Most of the titanium that ATI makes for commercial aerospace is SQ, which goes into structural parts, while PQ — necessary for rotating components in jet engines — comprises a smaller percentage.
The Richland expansion comes as part of the company's broader plans to support growing demand from commercial aerospace and defense industries. On the nickel side, ATI is increasing melting capacity by 8-10pc through a $50mn project that is expected to come on line in 2026.
The company on Thursday announced it had expanded its supply partnership with Boeing to include a broader scope of titanium products, such as sheet from ATI's new finishing facility in South Carolina. The extension to a preexisting long-term agreement additionally gives ATI more direct access to Boeing's supply network, while also increasing the number of titanium alloys the company provides the airframer.
Quarterly sales of jet engine products surged by 27pc to $448mn on the year, driving overall earnings growth for ATI. Lead times for the company's isothermal forgings are into 2027, as it continues to balance output between spares for aftermarket services and new builds.
ATI boosted deliveries of forgings to Pratt & Whitney, as the engine-maker works through its GTF fleet management program after a "powder metal" issue grounded hundreds of Airbus' A320neo aircraft.
The company's quarterly profit increased by 23pc to $100mn on the year, while revenues gained by 4.1pc to $1.1bn in the same timeframe.
