ATI expects aerospace demand to remain strong

US specialty metals producer Allegheny Technologies (ATI) expects strong demand from the aerospace sector to continue after driving sales higher in the second quarter from a year ago.

Pittsburgh-based ATI posted second quarter sales of $1.01bn, a 15pc increase compared in the same period a year earlier, largely driven by its high performance materials and components (HPMC) segment.

"HPMC segment improved at a faster pace than expected," ATI chief executive Rich Harshman said.

Sales of next-generation jet engine products were up by 39pc year-over-year, driving HPMC segment operating profit margin to 16.5pc of sales, Harshman said.

Aerospace and defense during the second quarter represented 74pc of total segment sales or $438.5mn, 3pc greater than the prior quarter.

Total shipments totaled 189.9mn lbs in the quarter, up from 188.8mn lbs in the same period a year earlier. High-value flat-rolled product shipments grew by 14pc from a year ago to 84.6mn lbs, while standard shipments declined by 8pc to 105mn lbs.

Average selling prices for high-value products were $3.13/lb, up from $2.84/lb in the prior year period. Standard product prices averaged $1.42/lb, up from $1.23/lb from a year ago.

Stronger market conditions and higher product demand increased profit for the second quarter to $72.8mn compared with $10.1mn a year earlier.

ATI said the US government review of its exclusion request on stainless steel imports on behalf of its 50-50 joint venture with an affiliate of China-based Tsingshan Group is ongoing.

The joint venture, which began commercial operations early this year, imports semi-finished stainless steel slabs products from Indonesia which are subject to the 25pc tariffs imposed on all stainless steel products imported into the US on the recently enacted Section 232.

Harshman said US stainless steel slab production is currently at a 95pc utilization rate.