After the terrorist attacks of September 11, demand for aircraft went into a steep decline and the sale and use of nickel-based alloys, super stainless steels, copper and brass products, and especially titanium, tanked. Commercial airplane manufacturing had just gone into an upswing in early 2001 that was expected to last for a decade or more. However, after the collapse of the World Trade Center, airline traffic collapsed and aircraft manufacture went into an extended tailspin. That's why demand for titanium mill products in the U.S., the world's largest market, fell by 34% in 2002. Other world events and airline financial woes have delayed aviation recovery, but the need to replace an aging world passenger-airline fleet appears to have taken hold in 2005. That's why the titanium market is hot—and will get hotter in 2006 and beyond, keeping pressure on supply from the limited number of producers in the U.S. and Russia. Airplanes with 100 seats or more now are expected to rise from 10,800 aircraft in 2004 to 30,000 or more in 2020. An average 20% of each of the new-generation planes will be titanium, for airframes or parts or engine components. Economists say future growth in titanium demand will be boosted further by future production of military aircraft, which will be close to 40% titanium.

stundza@reedbusiness.com