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China's Titanium Consumption

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Published March 30, 2004 China may add swing to global titanium demand CHINA gobbles up one-tenth of the world's titanium to feed red-hot industrial growth and one overlooked swing factor in the long term may be the country's love affair with golf. Driving force: China is set to make more golf clubs as more US brands outsource their manufacturing Vendors from Callaway to Nike are counting on rip-roaring growth to drive a new generation of status-conscious Chinese devotees of golf. That means brighter sales for producers of the metal from Rio Tinto to Sumitomo Titanium, given that one golf club head needs about 100 grams of titanium. Demand for titanium sheets and bars is expected to jump 15 per cent to about 8,000 tonnes in 2004, analysts say. And prices have been rising. Ferro-titanium prices are now quoted at US$9.75/10.25 a kg, up from around US$4.35 at the beginning of the year. Going forward, the sky's the limit. The golf club manufacturing sector already uses up a tenth of the country's annual titanium demand. But golfers now make up less than 0.1 per cent of China's population. Years of economic growth is swelling the ranks of the middle class and the sport is gaining popularity. 'China definitely has the potential of being the fastest growing market, given the low proportion of its population currently playing golf,' said David Blennerhassett, head of research at Sinopac Securities Asia in Hong Kong. China and India are expected to be the next drivers of a global golf club market now worth US$4 billion a year - and that could grow 25 per cent annually for both countries over the next five years, according to US market research firm E-Composites Inc. China now makes 30 million clubs each year, mostly for export to the US and Japan. China now supplies 25 to 30 per cent of the world's golf club demand. That could mushroom to 70 per cent in the next three years as more US firms outsource their golf equipment-making operations whilst keeping one eye on the domestic potential. - Reuters