CITIC Construction Investment: Demand for titanium alloys has entered an explosion period, 3D printing expands application boundaries

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that with its unique advantages such as high strength, low density, corrosion resistance, and good biocompatibility, titanium has shown irreplaceable uses in various fields of aerospace, medical care, consumer electronics, and daily life. In the future, as applications in aircraft, rockets, humanoid robots, and 3C consumption grow, demand for titanium alloys will enter an explosion period. It is estimated that demand for titanium alloys will grow by more than 10% in the next three years. Furthermore, the maturity of 3D printing technology has greatly expanded the application boundaries of titanium alloys. In the field of precision parts that are difficult to process, 3D printing technology and titanium alloy powder raw materials have unique advantages. The application of titanium alloy powder will move from stage 0-1 to stage 1-10. In the titanium industry chain, downstream titanium materials and titanium alloy powders are growing the fastest.

CITIC Construction Investment's main views are as follows:

Titanium Industry Chain: Two Paths for Chemicals and Metals

The industrial chain of the global titanium industry can be simply divided into two parts. One is the chemical industry chain: titanium ore → titanium dioxide; the other is the non-ferrous metal industry chain: titanium ore → titanium sponge → titanium alloy. Among them, titanium dioxide accounts for 82% of global consumption of titanium concentrate, which is used to produce coatings, plastics, etc.; titanium sponge accounts for about 11%, and is mainly used to produce titanium materials and various titanium alloys.

Titanium ore industry: high yield, low output, high degree of external dependence

Titanium ore is divided into high-grade rutile ore and low-grade ilmenite. The main domestic mineral is iron titanite. Most of it is distributed in the Panxi region. The domestic titanium ore industry is highly concentrated. Four companies, Pangang Group, Longbai Group, Anning Co., Ltd., and Heavy Steel Xichang account for more than 60% of the country's production. In 2024, the world produced 9.4 million tons of titanium concentrate, China produced 3.04 million tons, imported 5.05 million tons, and is highly dependent on high quality foreign minerals.

Sponge titanium industry: China accounts for 70% of supply, and there is excess low-end production capacity

In 2024, the world produced 320,000 tons of titanium sponge, of which China produced 220,000 tons, accounting for 69% of the world. China imported 101 tons of titanium sponge and exported 5,993 tons of titanium sponge, making it a net exporter. In 2024, China's sponge titanium production capacity utilization rate was 85%, and the global capacity utilization rate was low. Low-end sponge titanium production capacity expanded in a disorderly manner, and production capacity was overcapacity, so profits were poor. High-end sponge titanium had certain technical barriers and certification barriers, and retained reasonable profits.

Titanium processing materials and titanium powder industry: demand is growing rapidly and application prospects are broad

In recent years, the amount of titanium used in aerospace in China has entered the fast track of development. It has grown from 40,000 tons in 2011 to 32,200 tons in 2024, and its share of total consumption has increased from 8% to 21.3%. However, in North America and the European Union, which have well-developed aerospace and military defense industries, especially the US, more than 50% of demand for titanium products comes from the aerospace and defense industries. In the future, titanium alloy consumption in aerospace, 3C electronics and other fields will continue to grow rapidly, driving the growth rate of titanium consumption.

In addition, 3D printing technology has made great progress in recent years. Titanium alloy has high hardness and low thermal conductivity, and is extremely difficult to process. When processing using traditional CNC methods, it is easy to generate high temperatures and cause rapid tool wear, and the yield is low, and application is limited. 3D printing technology has expanded the application scenarios of titanium. Currently, about 20% of 3D printing materials are titanium alloy powder, which is the number one 3D printing material. Changes in titanium processing technology will further drive demand for titanium alloys.

Risk analysis: The large-scale application of the new technology falls short of the expected risk: Currently, the titanium alloy powder+3D printing technology solution has been verified 0-1 and has entered the 1-10 expansion stage, but the overall technical difficulty is high, and there is a risk that the large-scale application process will fall short of expectations. Risk of overcapacity: Although the overall demand for titanium alloy materials is trending upward, there are structural contradictions in the industry. High-end aerospace titanium faces rapid growth in demand and short supply, while low-end titanium used in traditional fields such as chemicals may face overcapacity and price wars. Technological iteration and market competitive pressure: Titanium alloy weight reduction solutions are replacing traditional metals, but at the same time, in some areas of weight reduction demand, new materials such as carbon fiber may also compete with titanium alloys.