The past 2 years have seen a global decline in the price of titanium sponge powder the raw material that is used during the kroll process to manufacture titanium in a usable form. The steps of the Kroll process are widely understood with the raw material being first sifted, then compacted, then melted to form an electrode and then melted to form a finished ingot. The ingot is the primary manufacturing state and it is at this point that the material can be bought, sold and transported for downstream processing.
The ingots are subject to further rolling, pressing, extruding, cutting and annealing to form the semi finished products which include tube, bar, sheet, wire, and powder products. But in a rapidly changing world over production of sponge, along with the lengthy and costly production process, and also the downturn in the global economy have left manufacturers reluctant to hold larger stock programs and also produce products speculatively. As such there is a surplus of titanium sponge powder which as resulted in falling prices.
Falling sponge prices should in practice be passed on to end customers however the opposite phenomenon is occurring where the price of finished and semi finished products is rising. One reason for this is the increasing caution in production as mentioned previously where manufacturers focus on core accounts rather than develop new opportunities to reduce risk and deliver on the bottom line.
So as many speculate how can one capitalise on the fluctuations in the price points. The material is not publicly traded and so such opportunities are reserved for those who are prepared to buy and sell the material directly. For that the advice would be to invest not in the material but the production process to take advantage of rising demand for finished products and the lowering prices of sponge.