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Chap ter 10 TITANIUM SUPPLY AND DEMAND AND PRICE TRENDS Despite the unusual history of titanium as a structural metal, it has much in common with its alternative construction materials. Viewed from thi s perspective, titanium's turbulent first 30 years and the steadily emerging strength of its industrial markets fit the usual pattern of increasing stability based on ever-widening diversity and proportion of incus t rial use s . Against this background, this chapter reviews the economic history of titanium and attempts to forecast its future to the year 2000. The panel recognizes that no one can do that reliably because no one knows which historical trends will persist and because unexpected events inevitably will occur and signif icantly alter the forecast. Titanium Supply Sponge U. S. and world capacity f or producing titanium sponge has been increasing rapidly since the sponge shortage of 1979-80 (Table 26~. U.S. capacity increased from 46 million lbs in 1979 to 61 million in 1981. Thi s increase of 33 percent is expected to increase 26 percent to 76 million lbs in 1982-84, provided U. S . producers go forward with their expansion plans and the planned plants of D-H Titanium, Albany Titanium, and ITI are completed and put into production. (For reference, Appendix I lists major organizations in the U.S. titanium industry.) In retrospect, it is interesting to compare the current situation with that in 1959 when U.S. sponge production capacity was 58 million lbs. Government-subsidized sponge plants operated by DuPont (8.6 million lbs), CRAVAT ~ 12 million lbs), Dow ~ 3.5 million lbs), and Union Carbide (5 million lbs) shut down as a result of withdrawal of government support and poor business prospects. A major factor was the abrupt switch in U.S. defense strategy from dependence on manned aircraft to nonairbreathing missiles. Present and future sponge producers must have carefully examined the current prospects for titanium sponge and mill products before deciding to proceed with their expansion and new plant plans . 125
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126 TABLE 26 World Titanium Sponge Capacity (thousand pounds) __ Source 1979 1980 1981 1982-84 Uni ted S Late s TIlIET 26,00028,00030,000 32,000 RMI 15 ,00019 ,00019,000 19 ,000 OREl$E:T 5,0006,0009,OOO 9,000 Teledyne Wah Chang--3,0003 ,000 3,000 1>H Titanium ~--500 5, ooo International Titanium -- -- -- 8, 000 Subtotal 46,000 56,000 61,50076,000 Japan Os aka Toho Ni ppon Soda Ishizuka Research Subt otal 21,20026,400 14,60020,000 __4,800 ___ 3S,80051,200 29,000 26,400 4, 800 40,000 32,000 4,800 2 800 60, 200 79, 600 Europe IMI5,000 4,0003,000 - DTL (RR Consortium)- -- 1l,000 European Consortium-- -- NA Subtotal5,000 4,0003,000 11,000 Peoples Republic of China4,000 4,0005,000 6,000 Sovie t Union Total 86,000 94,000 98~000 100,000 176,800 209,200 227,700 272,600 a Re ported to be postponed until 1985 . NA 5 Data not available. Since 19 79, world capacity for producing titanium sponge has increased by 29 percent to 228 million lbs in 1981, including the Japanese expansion of 100 percent since early 1979. It will increase to about 270 million lbs based on new greenfield plants planned in the United States and the United Kingdom.' In addition, there are many announced or unannounced studies being conducted in the United States and abroad concerning the opening of new sponge plants. Principal action has been planned by a German-French group, several consortia in Australia, and efforts by the People's Republic of China (PRC) to attract outside support to expand their capacity to 20 million lbs. Even without such
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127 support, the PRO capacity is scheduled to increase to 6 million lbs by 1983. In the United States, the building of new titanium plants has been considered by several oil and metal companie s . Thus, the new capacity figures stated in. Table 26 may prove to be conservative. Imported sponge has been used for many years in producing titanium products in the United States (Figure 18) . The reason f or this use of heavy imported sponge is that the nonintegrated melters, who comprise about 30 percent of U.S. ingot capacity, have preferred vacuum-distilled sponge imported from Japan and the Soviet Union. These imports offer equivalent or superior price and quality, and because of better vacuum arc melting (VAR) melting characteristics as noted earlier, U.S. sponge consumption has exceeded domestic capacity only in two periods, 1974 and 1979-80. Imports have been important in filling these gaps; however, the other factors mentioned keep the nonintegrated melters as major importers 0 f sponge . The amount of scrap and imported sponge used and the quantity and price of domestic sponge are given in Table 27 and Figure 19. Imported sponge accounted f or about 25 percent of the sponge consumed during the f irst half of the 1970s. This declined to about 10 percent when imported sponge was in short supply due to the virtual withdrawal of Soviet sponge and the diversion of Japanese sponge to it s own and European consumption. Data on sources of imported sponge are given in Table 28. Prices of sponge (Figure 19) escalated sharply in 1979 but now are decreasing as a result of increased sponge capacity in the IJnited States and elsewhere. cot JOt it. Imeo~:.` ·0 . taco ,Etl t~72 1Bt, 1~4 1~?5 here ,.~7 here ·~' to 1~' Figure 18 Sponge consumption and supply. Source: TIBET presentation to the panel 1981.
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128 TABLE 27 U . S. Titanium Consumption and Sponge Pricing, 1970-1981 ~ in short tons ~ . Mill Consumption _ Sponge Ingo t Product Sponge Price Year Sponge Scrap Ingot Import Prod 'n Shipment Current$ 1970$a 1981 ~- 7.65 3.67 1980 26,943 15,406 42,494 4,777 41,804 27,076 7.02 3.61 1979 23,937 13,986 35,440 2,488 37,125 21,122 3.98 2.23 1978 19,854 12,318 30,746 1,474 31,385 17,650 3.28 2.00 1977 16,236 10,889 25,241 2,287 26,302 15,290 2.98 1.96 1976 13,315 9,211 21,417 1,778 21,850 14,500 2.70 1.88 1975 17,626 8,316 24,486 4,190 25,560 15,628 2.70 1.97 1974 26,896 10,599 31,563 6,963 36,131 17,443 2.2S 1.79 1973 20,173 10,038 25,409 5,172 28,932 14,530 1.42 1.23 1972 13,068 7,802 19,499 3,808 20,267 12,627 1.32 1.21 1971 12,145 6,149 17,058 2,803 18,387 11,241 1.32 1.27 1970 16,414 7,242 23,687 5,931 24,331 14,480 1.32 1.32 a De flated according to the GNP price deflator. Source: Data f rom U . S . Bureau of Census and U . S . Bureau of Mines, 1981. 15 at o a. ... _ 10 a: J J o C) oh ~ _ t~ _- W_ _ A,, , . . ,,,, . ,,,, ,, ,,, . , , . . , . . ., . ,,,, ,,. . , . ,_ ~[ piracy /// Estimated Spot Prices (excess capacity J 0 ~I I I ~ 1 1979 1 980 1 98t ~ 1982 1983 1984 YEAR Figure 19 Ti tank sponge prices . Source: Kane 1981.
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129 TABLE 28 U. S. Imports of Sponge (in short tons) . . . .. . Year Japan USSR IJK PRO Total 19722,2351,408164 - 3,808 19732,9371,628607 5,172 19742,8203,625685 6,963 19752,4041,313473 4,190 19761, 358256164 -- 1, 778 19771,673469245 -- 2,287 1978756604116 -- 1, 474 19792,0583301 99 2,488 19803,72016531a 861 4,777 a To Cal f rom European sources. Source: Data from U.S. Bureau of Census, 1981. Ingot As shown in Table 29, the 1981 ingot-making capacity of the IJnited States was 96 million lbs and that of the Western World was 130 million lbs. Based on a scrap content of 35 percent, full utilization of ingot melting capacity would require 62 million lbs of sponge in the United States and 85 million lbs of sponge in the Western World. The 1981 U.S. sponge capacity was 58 mi lllon lbs, 4 million lbs short (i.e., if more U.S. ingot production were suddenly required, the bottleneck would be sponge capacity, not melting capacity) . But this 1981 U.S . titanium sponge capacity is very close to U. S. melting capacity. Moreover, Western World (U.S., Japanese, and European) sponge capacity is 125 million lbs, 40 million lbs above f ull ingot melting capacity. Imports f ram the USSR and the PRC could further increase sponge availability. The pro jected U. S . sponge capacity of 76 million lbs in 1982-1984 would be suf f icient to provide sponge for all U . S . melters without the necessity f or importing sponge. It i s probable that ache nonintegrated titanium producers, with approximately 30 percent of the U. S . ingot capacity, will use new U.S. vacuum-distilled sponge as it becomes available if it is price competitive. However, they also probably will continue to import vacuum-distilled sponge from Japan and the Soviet Union because their VAR furnaces are designed to use vacuum-distilled sponge. Moreover, D-H Titanium, although it probably will consume all of its own production for several years, will be producing electrolytic titanium that is readily meltable in the nonintegrated producers' VAR furnaces. Further, since there is an 18 percent duty on sponge from Japan and a 2 5 percent duty on sponge f ram the Soviet Union, the amount
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1 TABLE 29 1981 Ingot Capacities 130 , ~ (in thousand lbs) Source United States TIMET RMI OREMET Subto tal HORNET Martin Marietta A1lvac Wah Chang Lawrence Subto tat Japan To ho Kobe Europe - Amount 33~000 23~000 10~000 66~000 (69% by integrated melters) 10~500 8~000 7~500 2~000 2~000 30,000 (31Z by independent melters) 96~000 Subtotal IMI Ce zus ~ Pechiney Krupp Contimet Teeside Subtotal T014 6,000 8,000 14,000 8,000 2,000 3,000 3,000 4,000 20~000 130,000 of imports probably will decline markedly when the new U.S. sponge plants are in production unless one or more foreign governments choose to subsidize exports to the United States. U. S . melting capacity could be increased relatively quickly at a co st of about $1,000 per annual ton, in contrast with the estimate of $10,000 per annual ton for new sponge capacity . In general , VAR f acilities designed for melting steel ingots cannot be used for titanium because they lack needed safety features and sufficient pumping capacity. Also, considerable expertise is needed to melt titanium, and it is expected that increased ingot capacity could be developed by expanding of existing titanium meltshops and trained work forces rather than by converting VAR steel facilities.
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131 Some titanium ingots for critical rotating components are triple melted to reduce the probability of occurrence of low-density inclusions (LDIs). With greater availability of vacuum-distilled sponge made with suf f ancient excess magnesium to ensure the absence of lower titanium chlorides ~ the suspected main cause of oxidation and sponge burning and the consequent formation of LDIs), there should be little need to triple melt. At present, between 10 and 20 percent of titanium ingots are triple melted . Elimination of this requirement would, in eff ect, increase U.S. ingot capacity. Most scrap is recycled by melting in composite consumable electrodes wherein scrap pieces and sponge briquettes are welded together, a proces s that is labor-intensive and costly. Better scrap-handling processes have been developed, including electron beam melting, inert electrode melting, and skull melting. Processes also have been developed to clean up and reprocess machine turnings, chips, and thin gauge sheet . Such scrap processing facilities will have to be increased, particularly if the use of castings increases. Only modest capital requirements are involved. Mi 11 Proces sing With f ew exceptions, the facilities used for fabricating titanium mill product s were designed and built for steel production. The deformation processing characteristics of titanium and its alloys are similar to those of stainless steel except that greater attention must be paid to surf ace processing with attendant greater losses. The problem of high deformation resistance of titanium alloys could be overcome by the use of heavier equipment capable of larger reductions at lower temperatures. U.S. forging capacity apparently is sufficient to handle open-die forging requirements for titanium. However, there are too few large closed-die facilities to process titanium forgings with large plan areas (e.g., landing gear beams, bulkheads, and carrythroughs) and long lead times recently have been required even for forgings of smaller sizes. The United States has only the two 35,000-ton and two 50,000-ton presses at Alcoa and Wyman Gordon for the forging of larger items. A campaign several years ago for the Air Force to procure a 200,000-ton press for large-plan f orgings was unsuccessf ul. Processing billets to heavy barstock generally is done in GEM swaying machines, some of which are small and outmoded and need replacement with heavier duty machines. Alloy sheet products generally are produced f rom ho t band cot 1 s rolled in Steckel mills. Cut sheets are cross-pack rolled to gauge (as stacked sheets encased in an iron envelope) on hand-sheet mills, a rather antiquated and clearly costly process. This has been dictated by the anisotropy of continuously strip-rolled alloys, and the consequent need to cross roll. Unalloyed titanium is strip processed to sheet, and some of the new beta alloys should be amenable to strip processing. Since the
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132 strip mills have very high production capability, there should be 1' ttle concern about their ability to handle any increase in demand for titanium strip. However, in the recent past, demand for strip mill time has been very heavy because 0 f the need for strip of several kinds of metal ~ not just titanium) . Consequently, the lead times experienced for titanium strip have been long. A possible, but f ar-f rom-certain, solution to the problem of continuously strip rolling any titanium alloy while achieving isotropy, is that of tonnage powder metallurgy discussed in Chapter 11. Plate mills suitable for producing ship plate and pressure vesse 1 plate are entirely suitable f or producing wide, thick plate of titanium alloys such as might be needed for submarine hulls, wing skins, and tube sheets. The mill capacity to produce large titanium plate is believed to be ent irely adequate . Approximately two-thirds of the total capacity to produce mill products of all types resides with the three integrated producers of sponge titanium, TIMET, RMI and OREMET, and one nonintegrated company, Martin Marietta Aluminum (MMA) . However, another score or so of companies also produce titanium products. A representative listing (not intended to be all-inclusive) of these companies and their products and approximate capacit ies i s given in Table 30. The listing serves to show that a large number of companies participate In making the semifinished forms of titanium that are shipped to customers who manufacture end-use items. The 1981 U.S. capacity to produce mill products Is about 60 million lbs (about 30,000 tons) divided among the several producers. The distribution of titanium products according to product form is illus bated by Table 31. Ti tanium Demand Historical Demand The above discussion has f ocused primarily on historical f acts, but, since past is prologue, it must be considered in making forecasts of f uture conditions. This discussion is concerned primari ly with such f orecasts . The growth of U.S. consumption of titanium mill products is shown in Figure 20. Like many metals important in military applications, the first 30 years of titanium production were marked by violent fluctuations in demand as the U.S. military aerospace strategy varied and, later, with the commercial aerospace demand cycles. In contrast, the growth of the
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Company TIME T RMI OREMET ~A Crucible HOWME:T Lawre nce Teledyne Allvac NF&M Lad ish W-G Viking Te ledyne Wa h Chang G.O. Carlson Trent Tube ITT Ha rper Cabot Dynamet As tromet Precision Rolled Products Ti-Tech Int'1 Precision Cast- parts 'ri-Line Wa shing ton S teel Zi=Tech 0 0 0 0 0 0 0 0 o o o 0 0 0 0 0 0 0 0 0 - 0 0 0 0 0 - p C 0 0 0 n O O 133 industrial market has been steady. In the 1980s, the U. S. market for titanium mill products was about 50 million lbs and was composed roughly of 70 to 80 percent commercial and military aerospace demand in equal amount s and 20 tc, 30 percent of other industrial demand . TABLE 30 U. S. Mill Product Producers and Their Capacities* Capacity Productsa To tal Product B b P S s E T O (million lbs o o o 21.0 13.0 3.0 5.0 3.0 b 0.3 1.5 2.5 3.0 3.0 2.5 2.5 0.5 0.3 0.8 b 0.2 W W C C 1.0 0.3 0.5 0.3 b 0.5 b 0.3 b 0.5 b 0.2 b 60.1/65.7 (larger figure includes estimates) a B=billet, b=bar, P=plate, S=sheet, s~s trip, E=extrusions, T=tubing, O=other, P=powder, C=castings, W=wire, R=rolled shapes. b Estimated. * Recent
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134 Mill Products Shipped Emil lion Ibs) 1000 500 300 200 100 ~0 30 20 10 is 3 2 Sponge Price (S/lb) 1000 8% growth Total ~/3% growth _ / ~/8% grows: <\_/~lodustrial ~I~V _ ~ ~ Sponge _ _ / ~ Deiced\ 1950 document dollars _~1970 dollars 500 300 200 1 50 30 20 10 5 3 2 1960 1970 1980 1990 2000 Figure 20 History of U. S . Mill products shipments and sponge price . Source: Jaf fee 1980. TABLE 31 1980 U.S. Titanium Mill Products Production (millions of lbs) Produc t Amount Sponge Consumed Do me st ic Imported Scrap Consumed 29 Mi 11 Product Produced 54 Billet F1 at Ro lied Rod, Bar, Wire Ex trus i ons Castings 44 10 ( 19 percent of sponge) 54 ( 6 5 percent of ingot ) (36 percent of ingot) ( 65 percent of ingot ) 4 7 .0 percent 22.0 percent 2 0. 0 pe rcent 10.5 percent 0.5 percent 100 .0 percent Note: Tubular products are included under flat rolled (welded) and extruded ~ seamless) . Generally, sponge weight is 1.0 to 1.2 times mill products, whereas ingot weight is 1. S to 1.7 time s mill produc t s .
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135 Over the past decade, the commercial aerospace market grew rapidly at an annual rate of about 15 percent while military aerospace remained e ssentially unchanged and the industrial sector grew at about 12 percent. Overall, the growth rate over the 1970s was about 6.5 percent. Table 32 illustrates the general makeup of the market . In the l950s, practically all titanium mill products were used in military aerospace applications. Today commercial aerospace and industrial applications comprise 60 to 7 S pe rcent of the market . TABLE 32 Market Mix for Mill Products 1955 1961 1966 1973 1980 Mill Products (10 million lbs) Aero space ~ percent Military Commercial Industrial ~ percent Source: Jaffee, 1980. Future Demand Near Term 4 11 29 29 54 94 74 75 44 28 3 20 19 36 50 3 6 6 20 22 A number of forecasts for the near-term titanic market are available. Most predict a flat market over the next five years (in the range of 50 to 60 million lbs of mill product annually). The commercial aerospace market, undoubtedly the main cause of the shortage in 1979-1980, has reduced and stretched out its titanium requirements whereas the military aerospace market for titanium has yet to respond to the Reagan administration's emphasis on increased defense procurement. The industrial market probably has been hurt by the sharp increase in the cost of titanium mill products, particularly tubing. Thus, over the next five years an oversupply of U.S. titanium sponge might be expected. Mill product capacity possibly could change from a current supply balance to a surplus of as much as 10 to IS million lbs in 198S. The most likely near-term new military procurement is the long-range combat aircraft (LRCA). This is typified by the B-1 bomber with about a 190,000 lbs buy weight of titanium for each plane with engines (some estimates are up to 250, 000 lbs per plane) . If 100 B-ls were procured, the additional t itanium in the near-term market, based on the 190, 000 lbs buy weight, would be 19 million lbs of mill product. This amount of
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i 143 TABLE 35 World Industrial Market for Titanium (millions of lbs) Mill Product Type _ Tube and pipe 11 12 Shee t and s tri p 4 4 Plate 3 4 Bar, billet 2 3 Wire 0 5 0 5 Castings 0 5 0 5 Total 21.0 24.0 Source: Kane presentation to the panel, March 1981 TABLE 36 World Mill Product Applications (millions of lbs) Ap plicat~on 1978 1980 Heat transfer 11 13 Electrodes 5 5 Chemical equipment 4 4 Mi scellaneous 1 1 Total 21 24 Source: Kane 1981. These categories were broken down further in Table 37; these data will be used as a basis for estimating long-term demand. TABLE 37 Ti tanium f or Chemical Equipment Use (millions of pounds) Use 1978 1980 Power plant condensers 6.0 7 . O Oil ref. ineries 1.5 1.8 Desalinization 1.0 1.3 Chemical plant 2.0 2.3 Mi scellaneous Sewage oxidation, plating baths, etc . Total 0.6 13.0 Source: Kane 1981.
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144 Heat Transf er __ The growth of t' tanium use in salt-water-cooled power-plant condensers has been spectacular, and it now is the largest industrial use. The pert ormance of titanium as a condenser tube material has been out standing and increased utilization i s anticipated despite the advent of several cheaper alternatives. A comparison of condenser tube prices in April 1981 for salt-water condenser tubing of equivalent strength is given in Table 38. TABLE 38 Salt-Water Condenser Tubing Prices (1981 dollars per foot) Metal Gauguin. ~Price Ti 0.028 1.85 A16X 0.028 1.47 29-4C ().028 1.12 Cu-lONi 0.049 1.08 The titanium tubing can be assembled by welding directly to titanium or titanium-clad tube sheets. This results in a virtually leak-ti ght condenser, which is much desired for system reliability, especially for nuclear power plants. (Condenser leakage is one of the major causes of forced outages in steam generators and turbines.) Increased use of titanium for condenser service is expected because of its selection for new nuclear plants in France, Japan, and Taiwan. The construction of U.S. power plants has been relatively slow, at a rate of about 2000 MW annually, because of overcapacity and reduced electricity consumption. However, additions to generating capacity are expected to be at a rate of 20,000 MW by 1990 after the present high reserve margin is reduced to normal. U. S . titanium condenser use certainly should increase as well . Ocean Thermal Energy Conversion (O'1EC) merits brief mention in this 1981 f orward look at titanium' s prospects because it could provide an important new market for titanium. How likely, how soon, and how much are not now known. The pro Sections of the world ' s future energy requirements that OTEC's proponents anticipate their technology will sup ply and the unprecedented large amounts of titanium that might be required f or this activity, strain the credence of those not familiar with the OTEC program. The only point the panel considers appropriate to put f orward in this report is that it seems prudent for the U. S. titanium industry to take cognizance of OTEC' s existence and assiduously to mono tor its progress worldwide. They should do everything appropriate to stay competitive with aluminum as OTEC' s chief material alternative, and compete with the Japanese who have already captured the first industrial OTEC pi lot production contract.
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145 The large ultimate prospects for OTEC, and for its consumption of titanium, can be gauged by the following brief outline: 1. Decades into the next century, OTEC proponents forecast that (a) OTEC-derived power could be made available anywhere in the world in amounts exceeding present total world energy consumption (Naef 1982~ ; (b) electric power produced in the U.S. by either OTEC direct-wired or fuel cell options at costs well below those f or oil and within the ranges quoted f or coal or nuclear power af ter 1990 (Naef 1982~; (c) manufacture of methanol to replace gasoline as a lower-cost, more environmentally-acceptable motor fuel (Avery 1981~; (d) methanol or ammonia as optimum fuels in fuel cells operating at considerably higher thermal efficiencies than either diesel or turbine engines (Richards 1981~; (e) ammonia fertilizer and chemical (Manley et al. 1981~; and (c) supply of lower-cost energy for such high-energy manufacturing processes as aluminum production (Manley et al. 1981~. 2. If titanium were selected for OTEC plants, by current projections, upward s of 54 million lbs per year would be required during the next decade; a quanti ty about equal to the entire U.S. titanium mill product production in it s peak year, 198() . An unprecedented 900 million lbs per year would be needed in the period from 2000 to 2025 (Avery 1981~. The basis f or this extraordinary prospect is the exploitation of solar energy on a truly global scale. This action fully exploits the facts that (a) subtropical, tropic, and equatorial seas constitute the world's largest and lowest-cost solar energy collectors; (b) the polar seas comprise an equally large and low-cost heat sink; and (c) the vast ocean currents thereby generated provide "inexhaustible" 40°F water only 3,000 feet below the roughly 80°F surface water. The latter would be used to vaporize ammonia to drive an electric turbogenerator, while the 40 °F water i s pumped to the surf ace to condense the ammonia vapor. Although the thermal efficiency is only about 2 1/2 percent, the fuel, however, i s " f ree . ' But the volumes of sea water--and the corresponding sizes of titanium (or aluminum) heat exchangers--necessitated by this low thermal efficiency are vast. For example, a 220 MWe OTEC plant would have a water flow comparable to that of Boulder Dam. However, it would require only 4 ~ MW of pumping power ~ Naef 1982 ~ . Thus OTEC f aces f ormidable scat e-up problems. However, it has none of the exotic materials or exotic scientific and engineering challenges that are posed by alternative energy sources like nuclear and fusion processes. Similarly, there are essentially no terrorist related or environmental problems. On the contrary, mariculture is a promising byproduct option. Net OTEC power generation was first successfully demonstrated in the deep ocean of f Hawaii by "Mini-OTEC" in 1979. A titanium heat exchanger was used
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146 (Owens and Tremble 1980~. Since October 1981, a Japanese-built and operated OTEC plant on the island nation of Nauru near the equator has been successfully producing net electric power in a pilot operation. Japanese titanium Is being used as the heat exchanger material (Naef 1982). Several of the more competent engineering organizations of the world are active in OTEC: General Elecric, Westinghouse, Brown & Root, Gibbs and Hill, TRW, EBASCO, J. R. McDermott, Science Applications, Inc., Global Marine, Lockheed, Owens-Corning, M. W. Kellogg, Raytheon, Rand Corp., Applied Physics Laboratory of the Johns Hopkins University, Stone & Weber, General Dynamics, and many others (Richards 1982~. At least nine independent engineering studies have concluded that OTEC electric energy will be cost-competitive with electricity produced by coal or nuclear power; these nine are: General Electric, Westinghouse, Toshiba, Lockheed, Applied Physic Laboratory of the Johns Hopkins University, Rand Corp., Mitre Corp., Hawaii Natural Energy Institute, and Science Applications, Inc. The last organization has concluded that: "Although dependent on many parameters, nominal OTEC levelized bus tear electricity costs are estimated at 6~/KWH for 400MW units" (Dunbar 1981; and Manley et al. 1981~. The Department of Energy announced early in 1982 the award of two cost-sharing contracts of $900,000 each for conceptual designs of 40MW OTEC p ilot plants to General Electric and to Ocean Thermal Corporation. General Electric plans to use an aluminum heat exchanger and Ocean Thermal, titanium (Richards 1982~. Ti tantrum i s a logical candidate f or OTEC heat exchangers because it can be expected to serve reliably for at least 30 years whereas aluminum presents serious questions about adequate longevity; estimated at 15 years despite at least doubled wall thickness compared with titanium. The costs of candidate heat-exchanger materials are not far apart (private communication, E. Kinelski, DoE, July 1981) if the projected cost of electricity produced from equipment constructed from the various candidates ~ s considered (Table 39~. The prices of the titanium and stainless steel exchangers are comparable. The chief questions relative to the use of titanium are the reality of the OTEC application itself and whether the heat exchangers would be made of aluminum or of titanium. TABLE 39 Cost Comparison of Alternative Materials for OTEC Shell and Tube Heat Exchangers Metal Ti A1-6X 29-4C A1-3003 _ _ _ Labor and Material (1981 $/kW) 950 900 810 740
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147 The quantities of titanium required, if OTEC is fully developed, would dwarf present aerospace needs and would revolutionize the titanium industry. OTEC may never reach the full production envisioned by its proponents. Its potential importance to the titanium outlook is nevertheless so great that, as noted earlier, its development should be monitored closely and supported by the U.S. titanium industry wherever possible and appropriate. De salination of seawater in multistage f lash evaporators may expand significantly, particularly in the Middle East where water is in short supply and capital is readily available. Already several large units, each utilizing over 2 million lbs of titanium, have been installed in Saudi Arabia (Al Jubail and elsewhere) by the Japanese. Harvey Aluminum (now Martin Marietta Aluminum) constructed the first desalination plant in St. Croix, Virgin Islands, in 1965. Use of titanium for desalination might increase manyf old by the year 2000. Ti tanium heat-exchanger applications for cooling sour crudes in offshore wells, in oil refineries, and for chemical plant use are well established and are expected to show steady growth. Titanium heat exchangers also are of interest for binary-cycle geothermal power plant s . This would be a new requirement . Elec bodes The use o f titanium in dimensionally stable anodes f or chlorine and sodium chlorate manufacture is well established. Thin platinum-type coatings on the titanium are used, and power consumption is much lower than when graphite anodes are used. This market, however, is not expected to increase significantly. The cathode market for electrowinning of metals from sulfide and lateritic ores in acid solution is an important possible future application. This Is a means for avoiding the roasting of the sulfide ores with attendant environmental problems. Recent titanium consumption data for electrodes are given in Table 40. Chemical Process Equl pment (Excluding Heat Transfer) After a long period of introduction, titanium has become a well-established material of construction for chemical process equipment ~ Table 41) . Continued growth of the market is assumed, unless the price of titanium mid 1 products increases greatly relative to competitive corrosion-resistant materials. The prices for corrosion-resistant materials, as determined by one producer in 1978 (Table 42), reveal the type of competition that titanium must face. Titanium was about twice as expensive on a dollar per volume basis as 316L stainless steel, about equal to 317L and 904L steels ~ and less expensive than some of the more exotic alloys.
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Ma ter tats Titanium 316L 317L 9 04L 20Cb 3 Monel 400 Haste lloy C 27 6 148 TABLE 40 Titanium for Electrode Applications (millions of lbs ~ Application 1978 1980 Chlorine anodes 2 . 0 2 . () Sodium chlorate anodes 1.0 1. O Nickel plating baskets 0.8 0.8 Anodizing racks 0.3 O. 3 Copper cathodes O. .2 0.2 Mi scellaneous 0. 7 O. 7 Total 5.0 5.0 Source: Kane 1981. TABLE 41 Ti tanium Use in Chemical Process Equipment (millions of lbs . Equipment Type 1978 1980 _ Tanks and vessels 2.0 2.5 Mixers and internals 0.5 0.6 Drum washers and diffusers 0.5 0.6 Piping systems 0.4 0.3 Hardware - pumps, valves, etc. 0.2 Mi scellaneous O. . 4 1. O Total 4.0 5.0 Source: Kane 1981. TABLE 42 Price of Titanium and Other Corrosion-Resistant Materials in 1978 (dollars per square foot of 1/4 inch-thick plate) Price 32 16 29 32 50 41 83 Source: RMI presentation to the panel, March 1981.
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149 A more recent comparison of the relative price of corrosion-resistant alloys In 1/4-inch plate, 5,000 lbs quantities, indicates that titanium remains competitive with nickel-based alloys despite its price rise. Down-Ho 1 e Tubi ng A potentially large application for titanium alloys is for down-hole tubulars in deep-hole sour-gas wells. The application involves service at depths up to 20,000 feet; at pressures up to 20,000 psi and at temperatures 11p to 260°C in very aggressive environments that contain 20 to 50 percent H2S, 10 percent CO2, 25 percent brine, and an acid pH o f 5 to 5.5. Ti tanium alloys have been successfully tested under these conditions, but the particular alloy that has the best combination of strength and corrosion resistance is still under investigation. A titanium drill string would be used only under the most arduous conditions, with less costly materials used at lower temperatures. A typical string might involve 10, 000 f eet of 3-inch-diameter seamless titanium tubing with 0.5 inch wall thickness. This would require about 100, 000 lbs of high-strength, titanium alloy tubing. Since most new gas wells will be deep, over 15,000 feet, the deep-well application could require tens of millions of lbs of high-strength, titanium alloy. Titanium alloys also could be useful for deep geothermal wells because the environment is similar, although the temperatures and pressures are less. However, far fewer geothermal wells would be drilled. The geothermal sources most likely to be used are those which have a pH greater than 5.5 that permit the use of steel down-hole piping. Mi scellaneous Included under this category is a host of small applications for titanium that generally involve a combination of strength or of some other mechanical property and corrosion resistance. Several of these might expand signif icantly. Steam turbines are a good example. The installed steam turbine capacity is expected to be about 600 to 700 GW in the next 10 to 20 years. If the median-size turbine is 400 to 500 ME, this would car re spond t o 2, 000 t o 3, 000 low-pre s sure turbine s . Ti tanium ~ s o f interest for steam turbine blading in the corrosive, penultimate (L-1) row and in the long, las l-stage ~ LS ~ row. The requirement f or the L-1 row i s less, perhaps 1, 500 lbs per row of 16-inch L-1 blades or 3, 000 lbs for a double-flow turbine. The long, last-stage blade row might take 4,000 lbs of alloy titanium for 31-inch blades or 8,000 lbs for double flow. Equipping 100 turbines with titanium alloy L-1 and LS blades would require about 1 million lbs of barstock over the period of installation. Titanium blades have been under successful development for about 20 years, but i t probably will take another 10 to 20 years bef ore the
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150 application is generally accepted. There are alternative approaches to handling the corrosive row. The last-stage application would emerge only if many large turbines with extremely long blades were required, which is unlikely. Thus, the steam turbine blade application will probably remain small (less than 0.5 million lbs) for quite a while. Another example of a potentially large application is the automotive suspension spring. Because of the high strength, low modulus, and low density of heat-treated beta titanium alloys, titanium springs would weigh only 28 percent of comparable steel springs. The automotive spring application would involve very large production with the market estimated to be in the 10-million-pound range. The likelihood of adoption is small, however, because of the high cost of titanium and the large quantity required. Titanium alloys have been evaluated as a first-wall fusion-reactor material because of their excellent resistance to void formation and swelling after radiation by energetic neutrons and the relatively rapid decay of induced radioactivity. Such an application appears to be far off because fusion energy is estimated to be well into the twenty-first century. A probable market in the future would appear to be government purchases for the U.S. National Stockpile. Since 260 million lbs are required to meet the current stockpile ob jective of 390 million lbs, purchases of 20 million lbs annually would require 13 years. As advocated elsewhere in this report, this and related stockpile questions should be examined by appropriate ad hoc panels . Economics It is clear that the fluctuations in the availability and price of titanium products are closely coupled with the demand for the metal and the capacity to produce it. As the supply of titanium products nears the capacity of the domestic industry supplemented by imports, the shortage is easily exacerbated by purchases for inventory anticipating short supply. This drives up the price of titanium and extends delivery lead time s . Conversely, in periods of slack demand, purchasers of titanium products reduce their inventories and hold back on purchases in anticipation of price declines. Thus, the fluctuations in availability and price are worsened by the nature of the market. Titanium is not alone in this regard. Market instability is an inherent factor in most metal industries. The major worldwide expansion of titanium supply should serve to greatly stabilize the titanium market. The price of titanium has increased over the past 5 years about twice as much as commodity prices in general. The price of several other metals, notably cobalt and tantalum, increased about tenfold over the same period (now about threefold) while steel, aluminum, and nickel followed the general inflationary course of price rises.
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151 The aerospace market is relatively inelastic to the price of titanium products. The applications generally demand titanium's properties or a performance penalty must be paid. If near-net-shape technology matures, the use of titanium in aerospace could well decline in absolute magnitude. The industrial market for titanium, on the other hand, is markedly sensitive to price. Many projected major new applications will not materialize if the prices of titanium mill products stay at their present level relative to the price of alternative materials. Thus, the anticipated decline in titanium prices resulting f ram increased worldwide sponge capacity should have a marked beneficial effect in stabilizing and expanding the industrial market. Summa ry The f oregoing discussions attempt to demonstrate that the titanium industry is at a relatively early stage of development, that all of its present applications are firm, and that prospects are excellent for the development of some large new applications. Assuming that a growth of 7 percent annually for 10 years would double the present demand, and projecting from a ~ 980 base of 25,000 tons, U.S. production of 100,000 tons of mill products may be achieved by the year 2000. With 6 percent `growth, the consumption would be 75,000 tons by the year 2000, indicating the size of the possible error in the estimate from only minor variations in growth rate. World consumption of mill products is currently about twice U. S . consumpti on based on sponge . If this factor held through the year 2000, world consumption would be 200,000 tons at 7 percent growth and 150, 000 tons at 6 percent growth. It i s probable that world titanium sponge production capacity will lead demand by 15 to 25 percent. This has been the history of other metals, and it is expected for titanium as well. With increased supply relative to demand, the price of titanium products can be expected to drop in the short term, perhaps as much as 25 percent, and thus would be followed by increased prices along with the general course of commodity price variation with inflation. The violent f fluctuations in growth experienced during titanium' s f irst 30 years will diminish considerably during the next 20 years. The maturing of the industry with increased commercial and civilian markets, and the possible inauguration of a strategic stockpile purchase program (not an economic stockpile, see Chapter 11) might smooth out production spikes of both sponge and mill products and counteract demand f fluctuations over the next two decades.
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152 REFERENCES AVERY, W. H., Director of Ocean Energy Programs, Applied Physics Laboratory, Johns Hopkins University, Laurel, Maryland, Private Communication, July 1981. AVERY, W. H., OTEC Methanol, APL Quarterly Report, October-December 1981, 9-10. DUNBAR, L. E., Potential for OTEC in Developing Nations, 8th Ocean Energy Conference, Washington, DC, June 1981. JAEFEE, R. I., An Overview on Titanium Development and Application, Titanium ~ 80 Science and Technology, Proceedings of the Fourth International Conference on Titanium, Kyoto, Japan, May 19-22, 1980 (Also The Metallurgical Society of AIME, Warrendale, Pennsylvania, 1980) . KANE, R. L. 1981. Presentation before NMAB Titanium Availability Panel , Titanium Industrie s Corp., Fairf ie 1 d , New Jersey , March 1981. Lynd, L. E. 1980. Titanium. Mineral Facts and Problems, Bulletin 671. Washington, D.C.: U.S. Department of the Interior 1980. MANLEY, R., J. Bluestein and E. J. Francis: An Estimate of OTEC Costs, Market Potential, and Proof-of-Concept Vessel Financing, AIAA 2nd Terrestrial Energy Systems Conference, December 1-3, 1981, Colorado Springs, Colorado ~ 13 pp . NAEF , F . H.: S tatement on December 1981 EPRI Journal Article on OTEC , Feb. 16 , 1982, In Letter From F. H. Naef, President of the Ocean Energy Council, to F. L. Culler, President of EPRI, Feb. 7, 1982 . OWENS, W. L. and L. C. Trimble: Mini-OTEC Operational Results, Lockheed Report, Lockheed Corporation, Los Angeles, California 1980. RICHARDS, D., Investigation of OTEC-A~nnonia as an Alternative Fuel APL Quarterly Report, October-December 1981, 15-20. Williams, S. C. 1965. Report on Titanium, The Ninth Major Industrial Metal. Research Report Series A-6. New York: Brundage, Story, and Rose .
Representative terms from entire chapter: