Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Allegheny Technologies Incorporated (ATI) has entered into multiple long term contracts to supply isothermal and hot-die forgings to GE Aviation (GE) for its commercial jet engines. The pacts begin on January 2021 and will yield revenues of around $2.5bn for ATI over their duration. 


ATI is expected to enter other jet engines materials contracts with GE and Safran over the next three months. Earlier this year, ATI entered into an agreement with Rolls Royce, which runs through 2029, for rotating disc-quality nickel-based and other alloys for its Trent engines.


ATI is also eyeing an agreement with Airbus for its titanium fuselage requirements over the next several years. The deal, if it materializes, is likely to commence in 2021. 


These engines and airframes contracts—including an existing deal with Pratt & Whitney to provide isothermal forgings and nickel-based alloys for jet engines—could bring ATI’s 2021-2022 EBITDA to $650-700mn.


However, GE’s contract is expected to be ATI’s most profitable in the long term because the company could grow sales for some of its advanced alloys over the next seven or eight years. ATI’s revenue for the 12 months ended September 30, 2019 was $4.1bn.

Leave a Reply

Your email address will not be published.