Metalnewsnet 7 May:

Titanium Metals Corp. (Timet) has indicated it's looking to boost output, as higher shipments spurred by a return of commercial aerospace demand helped partially offset lower first-quarter selling prices for the producer.

Dallas-based Timet's net income in the first quarter fell 16 percent to $17.3 million vs. $20.6 million in the corresponding period last year, on net sales that rose 6.9 percent to $217.5 million from $203.4 million. After payment of its Series A preferred stock, net income attributable to Timet's common shareholders was down 14.8 percent to $16.7 million.

Timet's first-quarter results "reflect stronger demand than we have seen in the last several quarters as customer inventory levels within the commercial aerospace sector are beginning to stabilize and the global economy continues to show early signs of recovery," said Bobby D. O'Brien, president and chief executive officer.

First-quarter order trends indicate that "significant destocking activity in the commercial aerospace supply chain during 2009 has abated," O'Brien said, and he sees this trend continuing in the second quarter.

"We believe 2010 volumes will remain above 2009 volumes, and we are making necessary adjustments to operating levels in response to this increase in demand," added O'Brien, who didn't detail any future production increase.

Some buyers this year have expressed frustration with the titanium industry, which they believe has not acted quickly enough to raise production in the face of growing delivery lead times, although some producer sources have argued they're reacting as quickly as possible to an increase whose duration is still a matter of speculation.

O'Brien noted that lower titanium production rates last year have "contributed to a tightening supply of available scrap." Along with growing demand this year, the result has been higher scrap prices and longer lead times for both melted and mill products, he said.

Timet's first-quarter mill product shipments rose 16.5 percent over the year before to 3,395 tonnes (about 7.5 million pounds), while the average selling price fell 9.9 percent to $51.85 per kilogram (about $23.52 per pound).

Shipments of melted products shot up by 79.5 percent to 1,140 tonnes (about 2.5 million pounds) on a 25.2-percent drop in average price to $19.75 kg (about $8.96 per pound).

While this year's drop in average prices was blamed on both lower annual pricing under Timet's long-term customer supply agreement and lower spot market prices, the company noted that spot prices for melted and mill products are now increasing.