TIE

[AussieTrader]

Aircraft demand pushes titanium sky high, buyers say
02/20/2006 08:38:34
By Daniel Magnowski LONDON (Reuters) - Prices of titanium rose by 20 percent in the past year on demand from aircraft manufacturers and are at a point where other buyers fear they will be unable to afford it, market sources said on Monday.

"We now have a business-threatening situation," a source at a non-aerospace titanium consumer said.

"Lead times are lengthening and prices are uncontrollable. We may have to withdraw from the market -- it's an absolute nightmare."

He said this might mean his company would be unable to undertake long-term project requiring the use of titanium.

Prices of pure titanium rose by more than 20 percent over the past year, he said, as aircraft manufacturers bought it in large quantities.

Titanium, a strong, anti-corrosive metal, is needed in aircraft engines, airframes and other uses exposed to hostile conditions.

Pure titanium is made from titanium sponge <TIT-SPONGE-LON>, production of which fell following a slump in aircraft orders after September 11 2001.

"All the sponge manufacturers took capacity out because the market was so flat, then when aerospace took off again, so did prices," the titanium user said.

"There are other applications too -- titanium is used in power stations and desalination plants, which the Chinese are building hand over fist. Sponge capacity went out, then aerospace recovered, so now there is a massive shortfall in sponge supply."

Sponge traded at under $10 a kg for most of the preceding decade before spiking over $30 in early 2005.

It since fell to the mid-$20s but now showed signs of approaching $30 again, traders said.

"I've heard up to $27-28 for aerospace grade, and this could go up even further," one trader said.

Airliners under development such as the Boeing <BA.N> 787 Dreamliner and Airbus <EAD.PA> A-380 use greater quantities of the super-strong metal than earlier models, and suppliers of titanium products benefited from this increased demand.

"The market is busy due to aerospace business and prices are high," a UK-based manufacturer said.

Sales at Allegheny Technologies <ATI.N> rose 30 percent in 2005, and third-quarter sales at rival producer Titanium Metals Corporation <TIE.N> were up over 50 percent year-on-year.

At the other end of the product range, ferro-titanium <TIT-FERRO-LON> - has also been affected by demand from planemakers.

Ferro-titanium prices rose sharply in 2004 and 2005 as more scrap than usual was recycled for use in primary titanium units for sale to aircraft manufacturers, leaving ferro-titanium producers with higher input costs.

"People covered for the first quarter, but we foresee large enquiries for Q2 though we haven't seen them yet," a European dealer said.

"Prices are stable but fundamentals are still tight."

[calven]

Great find Aussie! (applaud)

TIE wil be great in 2006!

Also take a look at HCBK, might breakout tomorrow...

cal 

[nullzero]

Nice close on TIE today 43.31... up 2.58%
Watch closely for a breakout over 44.00 TIE is making new Highs

[calven]

A knew this one was a winner! Up a tons on this... still going up after the split!

52 week highs...

Might start taking some off the table when it gets to $45.00

[bananajo]

TIE on the move. Closed at 43.55 this week.

Look at this Insider transactions:

15-Feb-06 SIMMONS, HAROLD C
Chairman  75,000 Direct Purchase at $68.4073 - $68.739 per share. $5,143,0002 

14-Feb-06 GREEN, NORMAN N.
Director  4,000 Direct Purchase at $67.43 - $67.6 per share. $270,0002 

14-Feb-06 SIMMONS, HAROLD C
Chairman  145,000 Direct Purchase at $69.3111 per share. $10,050,109

[nullzero]

Alot of action today on TIE was upto 44.50 this morning and then dropped to 41.30... Picked up more shares at 41.60 and so far im up about 1%. Today was a perfect entry point.

[calven]

I am quite confident TIE shares will be up at least 20% in 2006 based on fundamentals. The question is whether or not I will have the guts to hold long enough. I like the idea of a trailing stop at 39.00-39.50 to protect gains. If TIE falls through that I can always buy back in...

The 25-26 day SMA seems to be fairly decent support. Nice horizontal support also...

Just keep in mind that TIE is a low float stock and can swing up and down 15% or more for no apparent reason.

For those looking for an entry now is a good time (40.15) This is just above the 25 day moving average. Also this provides a good risk/reward trade as 39.00 would be a nice stop limit level.

[calven]

TIE testing intraday downsloping resistance - for those daytraders out there...

[calven]

It's going to be a bumpy ride ... I suggest watching TIE very closely over the next two weeks and maintaining proper trailing stop levels to protect gains -  Short interest is picking up significantly!  I have no clue why but it does make me worried. Something is up!

30% of the float now short!!! http://www.shortsqueeze.com/index.php?symbol=TIE&submit=Enter

I dont see how this goes down though
1) 850 million in backlog and a strong forecast for titanium in 2006 and even beyond...
2) Recent Insider Purchases ($68.00)

This is shaping up to be either the biggest short squeezes or one of the worst cases of "news leaks" in my trading history...

Float      13,000,000
Short    3,800,000+!
min % = 29.23%  (likely closer to 35% now that TIE has dropped a little recently)

[nullzero]

Im down about -4-5% im holding in there I think we are due for a huge rebound that will send us into the 45s... Get prepared for a epic short squeeze! Buy in today at 38-39 dollars there isnt much downside pontenial anymore... Short Term target 45 dollars.

[bananajo]

stopped out 39.66 bought back 39.00 sold again 39.45. with this fundamentals and insider purchases I want to get back in before earnings. I'm watching.. 

I'm down about -4-5% I'm holding in there I think we are due for a huge rebound that will send us into the 45s... Get prepared for a epic short squeeze! Buy in today at 38-39 dollars there isn't much downside pontenial anymore... Short Term target 45 dollars.

[nullzero]

TIE on the move! we are moving thru 40.00s now! Expect a strong close in the 40-42s.

[mads888]

From a pure technical perspective, I am a bit worried about this stock as MACD showed a negative divergence and ADX indicator is also trending down even when PPS is going up.

Currently, I don't own this stock.

Any comments?

Thanks,
mads888

[AussieTrader]

Fundamentals are secure for TIE that is known. Technicals on chart are conflicting for me.

Big MACD negative divergance (weekly)
9 ema on weekly still nice support line (and has been for long time)
Sell off volume increasing

Short interest will be high because TIE has been on such a long and decent run that speculators will be betting it is time to give some of that gain back.

I stopped out today, I had a nice gain which got eroded to just a small one, coupled with the crappy market just now didn't want it going into the red.

I don't think I'll re-enter unless it breaks out above recent high area $44.50 as that is now a ceiling.

Will keep it on my watch list

[kuepper]

I believe recent retrace was due to the interest rate/yield curve environment. Institutional holdings were forced to scale back their portfolios across the board (especially in materials sectors) because of the higher risk of decreased business spending if the trend continues. This most likely forced TIE onto the radars of shorts, who took one look at the trend and recent press, and decided to try and take it down (especially with a low float). Hard to do when many of the investors are sitting on xxx% gains...

The fact is, TIE remains unchanged fundamentally. Alll of the industry reports I have read remain very bullish on titanium prices through '06 and '07. Their earnings preview said they expected strong results, and I doubt any new costs will surface when they release the statements. Drawdowns like this are not uncommon if you check TIEs history (I have been a shareholder for awhile now).

Blue horseshoe says: "Buy TIMET"