We are not picking up any new market intelligence this month to suggest there is an upward bias to earnings expectations for the specialty materials peer group. Last month, we raised near-term forecasts to reflect the better-than-expected nickel-based alloy and jet engine demand trends. However, we see few similarities in the titanium space as volume growth is holding in negative territory and contacts are still forecasting negative full-year growth. The main difference between this market and other alloys is the excess inventory held by the aero supply chain which could push the recovery starting point 6-9 months to the right (for companies levered to commercial airframe applications). Continue reading
Feedback coming out of the specialty materials channel supports the bearish call we are making on the global titanium market and selected companies within the specialty materials peer group. Bottomline, raw material providers, mill contacts, metal distributors, fabricators, and premium forgers are all voicing concerns about an extended period of end-demand weakness, a difficult CY21 environment, operating inefficiencies, and destabilized pricing environment.
Names within in our coverage universe with titanium leverage include Allegheny Technologies (ATI), Howmet Aerospace (HWM), Carpenter Technology (CRS) and Haynes International (HAYN). Continue reading
We updated our titanium industry model to account for revised commercial airframe and jet engine production targets and other ancillary factors. The revised industry analysis implies CY21 may be another challenging year for all global mills and service centers levered to aerospace alloys Continue reading