Master Alloys Market

Master alloy is a combination of a base metal such as aluminum, copper, and titanium with a relatively high percentage of two or more elements. It serves as a raw material for manufacturing of various alloys; titanium alloy industry is one of the major end-user of master alloys. Furthermore, it is widely used in the production of superalloys, aluminum alloys, and casting & steel industry. Thus, the growing demand for latter alloys in the end-user industries is likely to drive the overall demand for master alloys across the globe. For instance, increasing penetration of titanium alloys in the aerospace industry is estimated to boost the demand for master alloys such as vanadium aluminum, molybdenum aluminum, and chromium aluminum among other master alloys, which are widely used as an alloying element in the titanium industry. However, sluggish growth of steel industry may hamper the demand for master alloys as well as revenue. Furthermore, fragmented nature of the market is also expected to result in declining margins for master alloy producers.

The global superalloys market in terms of revenue is expected to grow at a CAGR of over ~6% during the forecast period. Superalloys is a type of high-performance alloys having various properties including high-temperature resistance, corrosion resistance, and good surface stability. To achieve these properties in superalloys, different types of master alloys are used as an alloying element in the production of superalloys. Some of the master alloys used for producing superalloys include Ferro niobium (FeNb), nickel niobium (NiNb), nickel tantalum (NiTa), nickel zirconium (NiZr) and nickel-vanadium among others. Owing to the properties of superalloys, they are widely used across an array of industries such as aerospace, for manufacturing of aircraft engines and components; automotive, for engine components; chemical process, for various processing equipment; marine, for submarine applications in manufacturing of turbines; and in pipelines in offshore drilling applications. Thus, increasing demand for superalloys in the latter industries coupled with growth in end-use industries is likely to boost the demand for master alloys during the forecast period.

Master alloys, when used as an alloying element to produce titanium, enhance the properties of base titanium by improving the heat and corrosion resistance properties of titanium at the same time enhance the other mechanical properties of titanium to be used in the aerospace industry. Rapidly changing design requirements in the aerospace industry have witnessed increasing adoption of high-performance materials for aircraft structures and engine components. Titanium alloys, one of the high-performance materials, are gaining more traction from the aerospace industry owing to their superior mechanical properties. As a result of the changing design aspects of civil aircraft, the consumption of titanium alloys per aircraft is increasing rapidly. Master alloys being an integral part of titanium alloy manufacturing, and the prevailing trend of titanium alloys penetration in aircraft manufacturing is likely to offer a plethora of opportunities for the global master alloys market.

The growth of the global aerospace industry in 2019 looks optimistic after sluggish growth in 2018. The aerospace industry is slated to grow at a CAGR of over ~4%. With global GDP rebounding, rising disposable income, and recovery in crude oil prices coupled with humongous defense spending in the emerging markets are propelling are propelling the demand for high-performance materials by fueling the demand for master alloys.

Master alloys such as chromium metal, ferroboron, and ferrovanadium among others are used in manufacturing different types of steels such as cast steel, micro alloyed steel, tool steel, and forged steel. Thus, the demand for master alloys majorly depends on the overall growth of the steel industry. Recent macroeconomic factors such as lower oil prices are slated to drive the growth of the global steel industry. Furthermore, prices of key raw materials have been declining and are likely to remain low amid weak steel demand. Chinese steel intensity is expected to decline with the economy undergoing structural changes. The authorities have cracked illegal steel capacity in recent times.

The U.S. steel demand is set to witness significant growth supported by numerous infrastructure projects in the pipeline. The automotive sector is estimated to respond positively regarding the steel demand with a drop in oil prices and surge in demand for passenger vehicles. With the steel mills running at a higher utilization rate has resulted in an oversupply of the market which, in turn, witnessed a decline in steel prices. Also, sluggish demand has been observed for steel pipes and tubes in oil & gas exploration on the backdrop of declining crude prices and penetration of high-performance plastic tubes and pipes. Hence, sluggish growth of steel industry might hamper the demand for master alloys in steel manufacturing.

The global master alloys market is highly fragmented; it comprises a limited number of tier 1 manufacturers and a substantial number of tier-2, tier-3, and Chinese manufacturers. Thus, the number of small-scale master alloys manufacturers and suppliers are aggravating in the market, mostly in the developing markets such as Asia Pacific leading to competitive pricing and declining margins. Thus, affecting the revenue of tier 1 players and overall master alloys market as a whole.