Rhenium growth forecast – Boeing forecast $4.5 trillion market for 34,000 new planes!

 Emirates planes small Rhenium small

Rhenium

Traded Purities: 99.9-99.99%

Traded Forms: Metal Pellets

Major Uses:

Nickel-based super alloys containing rhenium are used in the combustion chambers, turbine blades, and exhaust nozzles of jet engines.  These alloys usually contain 3% and some as much as 6% rhenium, making jet engine construction the largest single use for the element that is of critical strategic military importance for its use in high performance military jet and rocket engines.  The next-most important use for rhenium is for the chemical industry’s bimetallic platinum-rhenium catalysts used in petroleum-reforming for the production of high-octane hydrocarbons, which are used in the production of lead-free gasoline. Other uses for rhenium bearing alloys are in the construction of crucibles, electrical contacts, electromagnets, electron tubes and targets, heating elements, ionization gauges, mass spectrographs, metallic coatings, semiconductors, temperature controls, thermocouples, and vacuum tubes.

Commentary:

Because of its low availability relative to demand, rhenium is among the most expensive of metals.   According to historical spot price data published in Metalprices.com, the average of reported monthly spot prices of rhenium from December 2010 through August. 2012 is $4,318/kg.  The range during this time frame spans a low of about $4050/kg to a high of around $4550/kg. However, in that same time period, the average rhenium metal price, based on U.S. Census Bureau customs value, was reported to be about $2,000 per kilogram, hinting at the existence of a two tier market.  The reason behind this disconnect in spot price reporting and import statistics lies in the long term agreements (LTAs) between the world’s biggest exporter of rhenium, Molymet of Chile, and the world’s biggest consumers of the metal who happen to be jet engine manufacturers: GE, Pratt & Whitney, and Rolls Royce and their alloy manufacturing contract partners.

These LTAs were established many years ago and were honored and rigorously adhered to in spite of tumultuous spot market spikes where rhenium climbed to heights of $12,000 per kg in August, 2008.  These LTAs and their fixed price supply agreements – a sure benefit to jet engine manufacturers for the past several years – will soon expire in 2013.  It is suspected by many in the industry that Molymet will embrace a pricing scheme based more on spot world market pricing instead of continuing the current low, long term fixed pricing.  

Outlook: 

Rhenium compounds are included in molybdenum concentrates derived from porphyry copper deposits, and rhenium is recovered as a byproduct from roasting such molybdenum concentrates. Rhenium-containing products include ammonium perrhenate (APR), metal powder, and perrhenic acid. When compared to the 15 million tons of copper from which it is sourced, rhenium’s approximate 46 metric tons of supply and 54 metric tons of demand is by any standards small. But this small market has big applications – an un-substitutable 3% addition in nickel-base super alloys and 0.3% with platinum in bi-metallic reforming catalysts.

Most of the rhenium exported is in the form of rhenium metal pellets with a purity of 99.9%, where 90% or more of the exports are to the USA. Over 80% of the world’s rhenium is consumed in the manufacturing of super alloys for consumption mostly in jet engine aircraft turbine alloys.  Current projections for the future of commercial aerospace demand for rhenium are bullish, as the global aircraft fleet is expected to double over the next 20 years.  According to Boeing’s latest forecast, the company is projecting a $4.5 trillion market for 34,000 new planes, with most of that growth coming from new markets within the Asia-Pacific region. Boeing’s 2012 Current Market Outlook also sees airline traffic growing at a 5% annual rate over the next two decades, with cargo traffic projected to average 5.2% per year growth. In addition to these strong commercial aircraft projections, both the developed and the developing world’s sustained military investments in high tech aircraft will further increase this number supporting jet engine production.  For example, in early August 2012, Russia announced its plans to modernize its air force through 2020 by investing $723 billion toward purchasing 600 new planes, 1,000 new helicopters, and in overhauling existing planes.

Investing in Rhenium:

Because of its low availability relative to demand, rhenium is among the most expensive of metals.   According to historical spot price data published in Metalprices.com, the average of reported monthly spot prices of rhenium from December 2010 through August. 2012 is $4,318/kg.  The range during this time frame spans a low of about $4050/kg to a high of around $4550/kg. However, in that same time period, the average rhenium metal price, based on U.S. Census Bureau customs value, was reported to be about $2,000 per kilogram, hinting at the existence of a two tier market.  The reason behind this disconnect in spot price reporting and import statistics lies in the long term agreements (LTAs) between the world’s biggest exporter of rhenium and the world’s biggest consumers of the metal who happen to be jet engine manufacturers: GE, Pratt & Whitney, and Rolls Royce and their alloy manufacturing contract partners. These LTAs were established many years ago and were honored and rigorously adhered to in spite of tumultuous spot market spikes where rhenium climbed to heights of $12,000 per kg in August, 2008.  These LTAs and their fixed price supply agreements – a sure benefit to jet engine manufacturers for the past several years – have expired in 2013 and Molymet will embrace a pricing scheme based more on spot world market pricing instead of continuing the current low, long term fixed pricing.

In its seventh annual aircraft finance market forecast released in December 2013, Boeing projects that investors and financiers in the major aircraft finance markets will deliver balanced liquidity to fund another record global jetliner production year. It projects commercial aircraft deliveries in to be worth $112bn in 2014, with Boeing and its European rival Airbus together accounting for 95% of this market.

It should be noted that all SMH sourced Rhenium is produced within a chain of integrity that has been approved by the major industrial actors that are Rhenium end-users.

 Swissmetal Inc.s´ “Defense & Aviation” contains Rhenium, which makes it now accessible for private investors to purchase and profit from the increase in demand  over the years to come. Click here to contact Swissmetal for a free consultation on procurement & storage of this rare industrial metal.

Story Source: The above story was Published by SMH December 2013.