2 April 2014

The cost of titanium sponge continues to fall, falling to a record low

Fluctuations in prices for titanium sponge, which recently excited the corresponding market segment regularly, adversely affected the development of many large enterprises involved in this industrial sector. For quite a long time, the constant decline in the cost of material allowed today to reach the prices of this semi-finished product of its record low, according to the results of research over the past six years. There are two root causes of such unfortunate consequences. First, the active build-up of industrial capacities in the titanium sector led to a significant increase in inventory, almost all enterprises producing titanium semi-finished products. Secondly, a further deterioration in the situation was facilitated by a reduction in capacity, in many industries, consuming important technological and structural raw materials. The combination of such unfavorable conditions gradually led to a reduction in the price of the material and finally brought the titanium value up to that record minimum value. The final monetary equivalent of the material differs somewhat depending on the percentage content of the pure raw material alloy. However, according to Chinese manufacturers, only during the last week the titanium price fell by another one thousand yuan, in terms of each ton. In addition, buyers are warming up the situation, which can significantly bring down the cost of the material, knowing that it is easy to buy it from another manufacturer. The competition in the desire to realize its titanium reserve continues to provoke an additional drop in the price policy.

However, it is unlikely to be able to endlessly knock down the price to buyers, because the production of titanium is very labor intensive and requires a lot of financing. In the light of the constant increase in prices for energy resources, the cost of such material is constantly growing. With a subsequent decline in prices of the final product, producers will not work at a loss and will reduce the level of production or simply store finished raw materials, provoking supply shortages artificially. What will this situation lead to and what will be the future fate of the titanium sponge by the end of this year.

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