Vincent L.

Why I'm Not Buying Allegheny Technologies, Titanium Metals, or RTI International Metals, Just Yet

"However, the test flights for the Dreamliner have been pushed back (twice now), and this might be having some damage to the near term prospects to ATI."

From American Metal Market (9/7/2007)

News last week that the first test flight of the Boeing 787 Dreamliner has been postponed from September to November-December raised the possibility to some outsiders that it might signal a possible stretch-out in supplier deliveries.

But Boeing Co. says it isn't putting on the brakes. The test flight postponement has been one of the few delays for an aircraft whose production so far has been relatively glitch-free in terms of program schedules, especially for its huge scope. Not only is the 787 important to the aerospace industry around the world, it's particularly critical for titanium producers, for whom the aircraft is the largest in history in terms of potential business. The 787 contains an estimated buy weight of a record 225,000 to 250,000 pounds of titanium, and with 684 firm orders as of last week the plane may be getting the largest liftoff, in market terms, in the history of commercial transports. Delays in the Airbus A380 program--itself a large user of titanium but probably still far less than the 787 over the life of both programs--resulted in a discernable buildup of titanium inventories and probably contributed in part to an eventual reduction in mill lead times as well as to a softening in spot prices. But Boeing Commercial Airplanes, Seattle, said in response to an AMM query that the first flight's postponement "won't impact manufacturer delivery schedules." The Boeing unit pointed out that the flight "involves airplane No. 1, and we continue to produce the follow-on airplanes."