US urgently seeking new sources for strategic metals

US urgently seeking new sources for strategic metals

An article that appeared in the Financial Times for June 30th raises major concerns about both Chinese and US increased demand for titanium, speciality steels and alumininum.

Headlined ""Pentagon studies China's influence on price of weapons metals", the author, Nathan Hodge, states that

* "China's appetite for high-end metals such as titanium and speciality steels has raised alarms in the Pentagon that the US miltiary may lose access to affordable raw materials needed for sophisticated weapons systems. The adminstration's recent "Defence" bill underlines such fears

* Titanium is the most importnat metal so "threatened" - it's not only used in aircraft design but has "increased use in tanks and armed veheicles...as well as armour plating". The Pentagon's defence advanced research project (DARPAH) is funding a programme to develop new process for titanium production - to which end London's Imperial College has been awarded a contract of US$300,000 by the Pentagon . Quine-tec, a firm that emerged from the UK's own defence evaluation research agency, has been subcgtonracted for this work

*The US has only one current source for titaunium sponge - a domestic company called Titanium Metals Corp based in Denver

* While the US has previously used titanium scrap as a major source of supply, it has been winding down its stockpiles

* Suzanne Patrick , the outgoing head of policy at the US defence department, includes alumnininumt among the three categories of metals which the adminsitration now views as threaened by Chinese demand - along with speciality steels and titanium. No figures are given as to curent stockpiles or requirements but Ms Patrick says her department is seeking a "long-term fix" on price trends and "determinig whether the US defence industry requires new hedging strategies"

Says Ms Patrick: "It didn't escape our notice that costs in metals, such as speciality steels, alumininum and titanium have increased dramatically over the last three years - largely, we think, driven by Chinese demand"

[Abstracted from the Financial Times, June 30 2005]