At aluminum producer Arconic Corp., CEO Timothy D. Myers told shareholders that “while it remains the biggest question mark in our portfolio,” he believes that decisions about increasing build rates “boils down to timing. We fully expect the industry to return to pre-pandemic levels and are encouraged by indicators in the market.
“We believe we are headed for full recovery in the 2023-2024 time frame,” Myers continues. “Combined Boeing and Airbus aircraft build rates are expected to grow at a rate between 10 percent and 20 percent from 2021 through 2025.”
Keith A. Harvey, president and CEO of Kaiser Aluminum, agrees about following patterns. “Our anticipated timing for this recovery aligns with that of our major customers, and we expect the recovery to be the catalyst for restarting our Phase VII expansion at our Trentwood rolling mill to support the expected [demand] growth for heat-treat plate [among] our aerospace and general engineering customers,” he says.
Aerospace sales improved sequentially from the second half of last year. “As barriers for normalized air travel continue to fall, the full recovery of this business back to the record 2019 levels remains on track. We expect better results in the [second half] … with steady gains continuing through 2024.”
Kaiser leadership expects the aerospace market to recover to record 2019 levels by 2023 or 2024 and then resume its pre-pandemic 3 to 4 percent compound annual growth rate.
Allegheny Technologies Inc. is seeing momentum in demand for products used in commercial jet engines. During ATI’s last earnings call, President and CEO Robert S. Wetherbee said that’s “principally driven by the recovery of narrow-body platforms, particularly engine programs used on the Airbus A320 and A321 aircraft families.”
The demand recovery began in ATI’s forgings business, where lead times are six to nine months ahead of engine production. “We expect this positive growth trend to continue and expand as increased production rates on the [Boeing] 737 MAX become a larger part of our order book.”
The return to growth in Jet Engine Specialty Materials has lagged forgings, largely due to pockets of stranded inventory throughout the supply chain, according to Wetherbee. “This inventory is depleting, albeit at an uneven pace. We anticipate demand for materials to continue to increase for narrow-body engines but lag for wide-body engines,” he says.
ATI finds that the airframe market continues to be soft, again because of sluggish demand for wide-body models due to subdued international travel and stranded supply chain inventory. The trend is likely to continue through early 2022 “as the industry awaits the catalyst for increased wide-body production rates,” says Wetherbee.
Jean-Marc Germain, CEO for Constellium N.V., recently told investors that, “despite demand remaining at low levels in the near term, we remain confident that the long-term fundamentals driving aerospace demand growth remain intact, including growing passenger traffic and greater demand for new, more fuel-efficient aircraft.”