Bayne of Timet Outlines Titanium Supply Chain Dynamics and Challenges Caused by Pandemic By Andrew Bayne, Jr.
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n a normal environment, balancing a titanium supply chain has its challenges, as is typical of supply chains seen in any other industry. And similar to other supply chains, the titanium market has been challenged by the pandemic over the last two years, and it has been particularly strained of late due to Russia’s invasion of Ukraine. Lockdowns and Labor Shortages The outbreak of COVID-19 brought on a marked shift in the cargo industry. Ships embarked en masse to deliver much needed medical supplies, but the affected countries were shut down and had either no one to reload the ships, nothing to export or both. Thus, thousands of shipping containers were essentially idled due to a combined shortage of goods and laborers. These same labor shortages left ports, ships, and the global trucking industry understaffed. The virus and the lockdowns caused another global shift: the manufacture and delivery of goods targeted homebound customers as opposed to experiences and services. Mattress, appliances, and other home goods—all predominantly sourced from Eastern countries—were in high demand; however, logistics companies could not keep pace with the consumers’ quick pivot due to the before-mentioned impacts on shipping containers and logistics infrastructure. Demand was up but availability of container space was at an all-time low and, as a result, 10
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freight costs soared and lead times lengthened. As of this writing in May 2022, the situation is showing signs of improvement, but remains imbalanced. COVID-19 outbreaks continue to drive uncertainty, particularly in China.
generation fell to historical lows. The titanium scrap market is in the early phases of the recovery, but it is an expensive one emerging from such a deep trough. The typical aerospace titanium recovery cycle begins with a ramp in melting. This ramp precedes Sponge and Shipping the scrap generation desired Routes to support the ramp in Titanium sponge melt, which typically drives producers globally increased sponge and alloy continue to struggle to demand. find containers and vessels When COVID-19 to ship sponge to U.S. hit, the majority of scrap melters at an adequate rate in the aerospace system to support the aerospace was forever lost to ferroramp-up. Inventories are titanium and other lean in the United States, sacrificial markets, as melt Andrew Bayne, Jr. and it will be critical for volumes fell and scrap sponge producers to find generators needed cash to survive. creative solutions enabling them to The remaining aerospace scrap saw deliver sponge on time. Additionally, subpar scrap segregation due to UKTMP in Kazakhstan is struggling employee turnover issues; this drove with importing ilmenite from quality levels down, making normally Ukraine and exporting sponge to acceptable scrap unrecoverable customers due to the geographical into aerospace. It has taken time to relationship to Russia and Ukraine. bring back proper segregation and Feedstock, freight, and energy cleanliness practices to ensure quality costs have increased as well, scrap returns to the aerospace supply driving up overall input costs in chain; this is beginning to improve as the supply chain. It is imperative bad practices are eliminated. melters proactively plan ahead and Further complicating the tightness to accommodate the longer than in the aerospace scrap market is the normal purchasing cycle to secure strength of the ferro-titanium market requirements. which, for the most part, has not been impacted by the pandemic like Scrap and its Death Spiral aerospace. Auto manufacturers have The scrap market continues to be not slowed production other than tight. Aerospace’s 2020 downturn some impact from semi-conductor led to severe cuts within aerospace chip shortages. Demand continues manufacturing and, thus, scrap to be strong, and ferro-titanium
