LOS ANGELES The global
zirconium market, battered by the fallout of Japans 2011
nuclear disaster, should hit bottom this year, with initial
signs of recovery emerging in 2014, according to Allegheny
Technologies Inc.s (ATIs) top executive.
The market continues to feel the
impact of the earthquake and tsunami that destroyed the
Fukushima Daiichi nuclear plant in March 2011, with only two of
that countrys 50 nuclear energy plants currently in
operation, chairman, president and chief executive officer
Richard Harshman said during a quarterly earnings call.
According to most reports, this has left Japan with a large
nuclear fuel overhang that has only recently begun to
However, the specialty metals
producer has taken "some pretty aggressive actions in trying to
right-size" its zirconium flat-rolled products segment in
particular, Harshman said, adding that "were not done"
Pittsburgh-based ATIs Wah
Chang unit in Albany, Ore., is widely considered the only major
U.S. producer of zirconium and related alloys. The nuclear
industry is one of zirconiums primary markets, as it is
used as reactor fuel cladding in fuel rods that hold uranium
pellets (amm.com, March 16, 2011).
While he described the
commercial nuclear business as challenging due largely to
"uncertainty" in Japan, he said ATIs business with the
U.S. Navy "provides some level of stability" following the
renegotiation of a seven-year supply agreement for the
Navys nuclear program at the end of 2012.
Moreover, he said, there are
still refueling opportunities with such reactor builders as
Mississauga, Ontario-based Candu Energy Inc. and Areva SA of
France, as well as with Cranberry Township, Pa.-based
Westinghouse Electric Co. LLC and customers in Russia.
Harshman agreed with a
securities analyst that 2013 would mark a "trough" for
zirconium, after which it could begin to recover.
While Harshman said zirconium
capacity in China probably wont be enough to support that
countrys growing nuclear requirements, Chinas
chemical process industryonce a "growth market" for
ATIisnt one today or "going forward," either.
However, he cited chemical
processes outside China, including prospects in the United
States due to the low cost of natural gas, which is a feedstock
for chemical plants.
Over the next few years, ATI is
looking to "structure" its zirconium business in line with
opportunities it has identified. These measures should start to
take effect "if not in 2013, then certainly in 2014," Harshman