medical titanium –a supplier/producer perspective...vincent rocco –vsmpotirusus global titanium...

Vincent Rocco – VSMPO Tirus US

Medical Titanium – A Supplier/Producer PerspectiveTitanium USA 2019September 23, 2019


Agenda

• Global Titanium Market and The Medical Portion of It• Titanium Product Forms• Primary Alloys Used• Raw Material Considerations• Quality And Approval Requirements• Key Takeaways


Global Titanium Market

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Thou

sand

MT

Titanium Mill Product Production

JAPAN CHINA EUROPE USA OTHER VSMPO TOTAL

Source: USGS, CTA, JTA, Customs statistics, Internal Estimates


Market Breakdown by Industry

Aerospace – 42%

Industrial – 38%

Military – 11%

Medical – 3%Consumer/Other – 6%

Source: Internal Estimates


State of the Titanium Industry ‐ 2019

• Mills are running at or close to capacity

• Raw material supply is tight with volatile pricing

• Contract business reigns with little spot activity

• Lead times are extended0

10

20

30

40

50

60

70

Jan‐17 Jan‐18 Jan‐19Wee

ks

Titanium Bar Lead Times


Titanium Forecast by Industry

0

50,000

100,000

150,000

200,000

250,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

MT

INDUSTRIAL AEROSPACE EMERGING MEDICAL

CAGR• Consumer/Other 4.5%• Medical 3.3%• Aerospace 3.1%• Industrial 1.9%

Source: Internal Estimates


Considerations for Medical Titanium Customers

• With global end use markets expected to remain healthy and high capacity utilization, titanium demand should remain strong

• Competition for melt slot allocation • Lead times will likely continue to be extended• Priority will be given to contract customers• Stocking programs become more desirable• Titanium acquisition costs could rise


Medical Titanium Product Forms

Wire Bar/Rod Billet

Plate Sheet Powder


Titanium Mill Product Production Flow


Titanium Powder Forms

• Angular/Blocky– Less expensive generally– Can use scrap titanium– Ideal for thermal spray

applications– Also good for powder metallurgy

applications– Hazardous to handle and process

• Spherical– More expensive generally– Utilizes prime material

• Wire• Bar/Billet

– Good for 3D printing– Hazardous to handle and process


Popular Medical Titanium Alloys• CP Titanium

– Also supplied to the Industrial Market• Ti 6Al‐4V

– In high demand by the aerospace market• Ti 6Al‐4V ELI

– Primarily a medical alloy– Utilizes more sponge in the melt mix

• Ti 6Al – 7Nb– Nb can be expensive and hard to find– Concerns raised over the possible toxic effect on cells by released vanadium ions

initiated the development of non‐vanadium bearing titanium alloy• Ti 15Mo

– Multiple melts are usually required (more than 3X) in some cases– Potential HDI issues with Molybdenum

Key Titanium Raw Materials

Titanium Dioxide (TiO2) Vanadium Pentoxide (V2O5)


Titanium Sponge Production

Rutile Ilmenite

TiO2


TiO2 Market

• TiO2 Uses– Pigments– Coatings– UV Blocking Products– Titanium Sponge Production

55%

15%

10%

11%

5% 4%

TiO2 Market Share By Application

Paints & Coatings Plastics Pulp and Paper

Cosmetics Metal Others

Source: Grandview Research, TZMI


Titanium Sponge IndexJan‐20

09Ap

r‐20

09Jul‐2

009

Oct‐200

9Jan‐20

10Ap

r‐20

10Jul‐2

010

Oct‐201

0Jan‐20

11Ap

r‐20

11Jul‐2

011

Oct‐201

1Jan‐20

12Ap

r‐20

12Jul‐2

012

Oct‐201

2Jan‐20

13Ap

r‐20

13Jul‐2

013

Oct‐201

3Jan‐20

14Ap

r‐20

14Jul‐2

014

Oct‐201

4Jan‐20

15Ap

r‐20

15Jul‐2

015

Oct‐201

5Jan‐20

16Ap

r‐20

16Jul‐2

016

Oct‐201

6Jan‐20

17Ap

r‐20

17Jul‐2

017

Oct‐201

7Jan‐20

18Ap

r‐20

18Jul‐2

018

Oct‐201

8Jan‐20

19Ap

r‐20

19Jul‐2

019

Period of titanium raw materialsupply tightness


Vanadium Market

• Uses– Strengthen steel– Strengthens and provides temperature stability for titanium

– Vanadium chemicals used in catalysts, EPDM production, etc.

93%

4%3%

Consumption of Vanadium

Steel Titanium Chemicals

Source: TTP Squared


Periods of Volatility

• Array of vanadium market forces– Limited supply – Demand swings up and down make for

a difficult operating environment– Global economic events can

dramatically affect the vanadium market• South African power crisis • Earthquake in China• Oversupply and extended slump in steel demand

• Installation of Chinese rebar standards

Jan‐07

Jul‐0

7

Jan‐08

Jul‐0

8

Jan‐09

Jul‐0

9

Jan‐10

Jul‐1

0

Jan‐11

Jul‐1

1

Jan‐12

Jul‐1

2

Jan‐13

Jul‐1

3

Jan‐14

Jul‐1

4

Jan‐15

Jul‐1

5

Jan‐16

Jul‐1

6

Jan‐17

Jul‐1

7

Jan‐18

Jul‐1

8

Jan‐19

Jul‐1

9

Published V205 Index


Market Inflection Points

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Crude Steel Production Titanium Mineral Production Titanium Aerospace Shipments


Quality Requirements Evolution

ASTM F136, ASTM F1472

ASTM + OEM Specs

ASTM + OEM Specs + ASLs


Current Quality Environment• ASTM + OEM Specs + ASLs

– OEM specifications have ASTM basis but have specific requirements like higher strengths, tighter chemistries, tighter tolerances, etc.

– Approved Supplier List (ASL) specifies that only designated producers can supply the titanium

– Approving a new source is expensive and time consuming• Provide samples • Testing protocols followed and testing with an independent lab• Product validation program and schedule• Can take 12‐18 months in most cases

– Legacy specifications survive despite industry consolidation• “One company” with several site‐specific specifications


Implications for Medical Titanium

• Limits the amount of material available– Product has to meet OEM specification in addition to ASTM specs– If material meets the specification, it then must come from a producer

on the ASL– This applies even the part is produced at a contract manufacturer

• Limits the ability to quickly react to unforeseen events– Material will need to be recertified in many cases– Available titanium may not meet OEM specifications or come from an

approved supplier– Alternate non‐approved supplier could take 12‐18 months to be able

to provide material in tight situations


Key Takeaways

• Aerospace and industrial markets will drive the titanium industry as a whole.

• Stocking programs and buffer stock will insulate end users in times of inconsistent requirements.

• The further down the production process the required product form is, the longer the lead time and more expensive it will be.

• Medical titanium alloys are sometimes specialized and thus can compete for melt slots and bring added costs and lead times during high demand periods.

• External markets can have a significant effect on titanium production and raw materials pricing.

• Stringent quality standards can minimize some risk but can also limit the amount of material available and the amount of producers/suppliers that can supply it.


VSMPO At A Glance

• The world’s largest titanium producer• Vertically integrated

– Mines machining– All mill products production takes place in Verkhnaya

Salda• Quality approvals from all major aerospace

OEM’s and nearly all major medical OEM’s– Almost 300 total quality approvals– Production plant is certified to ISO 13485

• Global distribution centers– Eastern US, Western US, UK, Germany, and China– Stocking programs and buffer stock– JIT delivery

• US Manufacturing Capability – NF&M International– Quick turnaround capability– Conversion services– Produce medical bar, wire, and precision ground bar


Thank You!

medical titanium –a supplier/producer perspective...vincent rocco –vsmpotirusus global titanium...

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