ATI expects Aviation Demand to be Rebound in the Second Half of 2021
Allegheny Technologies (ATI) of the United States predicts that aerospace demand will stabilize in the first half of 2021 and that demand will continue to grow in the second half of the year. However, due to the outbreak of the COVID-19, the industry's sales will be approximately halved in 2020.
The company expects that although airframe destocking continues, the production of narrow-body aerospace products will increase in 2021. ATI's sales in the aerospace industry, its largest terminal market, dropped from US$529 million a year ago to US$256 million in 2020. Revenue in the fourth quarter fell 35% year-on-year to $658 million. The company lost US$1.12 billion in the quarter and made a profit of US$56.5 million in the same period last year. This was largely due to the US$1.08 billion in restructuring expenses incurred by exiting the stainless steel sheet commodity market in December last year.
Sales of the high-performance materials and components division in the fourth quarter were US$222 million, down from US$497 million in the fourth quarter of 2019. ATI's Advanced Alloys and Solutions segment sales fell 16% over the same period to 436 million U.S. dollars. Although the sales share of nickel-based alloy products decreased by 35% from the same period last year, nickel-based alloys still accounted for 28% of total product sales.
Sales of precision rolled strips and zirconium alloys made up for these losses, and the share of sales of titanium and precision forgings, castings and parts also declined. In the fourth quarter, only sales in the electronics and automotive markets improved. Total vehicle sales were US$76.5 million higher than the US$72.5 million in the same period last year. ATI's electronic product sales increased by 27% to $59.1 million.
Sales in other end markets of the company also declined, with jet engine revenues down 72% to $82 million. Energy market sales fell from US$185 million to US$150 million, and sales of food equipment and electrical appliances fell 44% to approximately US$28 million.
ATI 2020 revenue fell 28% to 2.98 billion U.S. dollars, and the company lost 1.57 billion U.S. dollars, reversing the 2019 profit of 258 million U.S. dollars.
