ATI titanium sales hit by OEM destocking, with engine demand offsetting weakness

ATI Factory

OEM destocking pressures ATI titanium sales in 2Q

ATI titanium sales weakened as Boeing and Airbus continued to destock inventories. The company said ATI titanium sales fell as airframe shipments dropped 7pc to $195mn. However, engine-related revenue surged and cushioned overall results. ATI titanium sales should stabilize as widebody build rates rise into 2026.

Capacity moves and engine programs support near-term outlook

ATI expects tightness in billets and landing-gear alloys by 4Q. Boeing lifted 787 output to seven per month, aiding demand. Meanwhile, the company broadened a titanium supply deal with Boeing. The agreement adds South Carolina sheet and more alloys.

ATI advanced new melt capacity to strengthen future flow. The Richland, Washington EB furnace targets standard-quality certification this year. Premium-quality approvals should follow in late 2025. Most ATI titanium serves structures, while PQ feeds rotating engine parts.

Engine programs drove growth across the quarter. Jet-engine product sales jumped 27pc to $448mn. Isothermal forging lead times stretch into 2027 as Pratt & Whitney ramps GTF fleet fixes. ATI balanced forgings between spares and new builds.

Financial snapshot signals resilience

ATI delivered higher profit despite airframe softness. Quarterly profit rose 23pc to $100mn on revenue up 4.1pc to $1.1bn. Nickel investments continue, with melting capacity rising 8-10pc by 2026. These steps hedge aerospace swings and support defense demand.

The Metalnomist Commentary

Destocking is a timing headwind, not a demand problem. With 787 and other widebodies improving, structural titanium should firm into 2026. Watch EB furnace qualifications and Boeing’s expanded scope, which could pull forward orders once inventory clears.

ATI Tariff Impact 2025 Expected to Be Minimal as Aerospace Demand and Supply Strategies Offset Risks

ATI

Flexible sourcing, defense exemptions, and surcharges help ATI maintain 2025 earnings guidance

Aerospace and jet engine orders drive resilience despite raw material tariffs on nickel, vanadium, and zirconium

ATI tariff impact 2025 is expected to be limited, as the specialty alloys producer forecasts only a $50 million pre-mitigation earnings hit from recent U.S. trade measures. Despite the new tariffs, the Texas-based firm has reaffirmed its 2025 earnings guidance, leveraging a combination of duty drawbacks, defense exemptions, and pass-through pricing clauses to insulate operations.

Strategic tools and flexible sourcing preserve profitability under new trade conditions

ATI noted that surcharge mechanisms on new orders, effective April 7, and selective tariff exclusions for aerospace-related inputs are already helping to preserve income and control exposure. Key exemptions were granted for materials critical to defense, although nickel scrap, hafnium, vanadium, molybdenum, and zirconium remain tariffed. While some industrial customers have slowed purchases amid uncertainty, ATI’s core aerospace and defense segments remain solid.

Notably, aerospace and defense represent 66% of ATI’s total business. The company is the exclusive source for five of seven nickel-based alloys used in jet engine hot sections and is a top forger of rotating components. As a result, full-year jet engine sales are projected to grow 15–20%, with Q1 sales up 35% to $421 million.

Titanium contracts and capacity expansion support long-term aerospace growth

Though titanium-heavy airframe sales rose modestly by 8.2% due to OEM inventory drawdowns, ATI secured a new five-year, $1 billion supply deal with Airbus for flat-rolled titanium products. The company is also qualifying premium-grade titanium from its new electron beam (EB) furnace in Richland, Washington, targeting critical aerospace applications.

For Q1, ATI reported a 47% profit increase, reaching $97 million, with revenue climbing nearly 10% to over $1.1 billion. These results affirm ATI’s ability to navigate short-term tariff turbulence while capitalizing on long-term demand trends.

The Metalnomist Commentary

The ATI tariff impact 2025 story underscores the value of vertical integration, contract structure, and defense-linked exemptions in managing geopolitical trade risks. ATI’s proactive pricing and sourcing strategy may set a precedent for specialty metals producers facing future tariff regimes.

ATI’s Forgings Backlog Soars Amid Increased MRO Demand

ATI

Specialty alloy producer ATI has seen its forgings backlog reach a historic high, fueled by heightened demand for Maintenance, Repair, and Overhaul (MRO) services. The demand for components used in the "hot section" of aircraft engines is driving this growth, particularly for isothermal forgings. The company’s forged products business has experienced significant lead-time extensions, with some parts now taking over a year to be delivered.

Strong Demand in Jet Engine Market Supports Sales Growth

MRO demand has had a substantial impact on ATI’s sales, particularly in the jet engine market. The company reported a 9% increase in sales for its jet engine end market in 2024, reaching $1.5 billion. This growth is largely attributed to the demand for isothermal forgings, a key component in the production of jet engines. The delay in new aircraft deliveries has forced airlines to extend the operational life of their fleets, creating a growing need for aftermarket services, including spares and upgrade kits.

To meet these demands, ATI increased its isothermal forgings output by 32% in 2024, following significant technology upgrades at its Cudahy, Wisconsin facility. The company also expanded its downstream capabilities, adding a heat treatment facility along with machining and testing capacities to improve throughput rates.

Looking Ahead: Titanium Products and Engine Revenue Growth

ATI anticipates continued growth in its jet engine business, projecting a similar 9% revenue increase for 2025. The company’s work with Pratt & Whitney, particularly the accelerated inspections of its PW1100G-JM (GTF) engine fleet used in Airbus’s A320neo program, is expected to further fuel this growth.

In addition, ATI has made significant investments in its titanium production capabilities. The company recently commissioned its electron beam (EB) furnace at its Richland, Washington facility, which will help boost titanium ingot production. With Boeing and Airbus planning to ramp up production of their titanium-bearing widebody models, ATI anticipates an acceleration in orders for titanium products in the second half of 2025.