LOGO

1

Outlook for Japan Titanium Industry 2011

International Titanium Association

27th Annual Conference & Exhibition October 3rd , 2011

Shozo Nishizawa

Chairman of the Japan Titanium Society

LOGO 2

1. Summary of Japan Earthquake & Tsunami

2. Effects on Japan Titanium Industry

3. Outlook for Japan Titanium Industry 2011

Agenda

LOGO 3

• We deeply appreciate support from the over 140 countries and titanium concerned friends and companies.

• We are facing unprecedented difficulties since the earthquake & tsunami which occurred on March 11th .

• We are working resolutely toward recovery.

Acknowledgement

LOGO 4

Japan Earthquake & Tsunami

Fukushima Nuclear Power Plant

• Height of Tsunami about 15 Meters (50ft.)

• March 11th, 2011

• Magnitude 9.0

Earthquake Epicenter

Huge Tsunami Hit Region

• Highest Tsunami 38 Meters (125ft.)

(Waters raged inland to mountains)

• 500km x 200km

Fault Rupture

LOGO 5

Japan Earthquake & Tsunami

• Number of deaths 15,800

• Number of missing 4,100

LOGO 6

• Houses & Buildings

swept away or damaged

• Estimated financial loss B$200～B$300

Japan Earthquake & Tsunami

330,000

LOGO 7

• Operation of power plants near the earthquake epicenter were shutdown.

• As a result, 20～25％ of the electricity generation capacity was lost (East Japan).

Japan Earthquake & Tsunami

LOGO 8

Power shortages destabilized operations at many production plants.

・Electronic Parts

・Iron and Steel

・Nonferrous Metals

・Automobiles

・Chemical Engineering

・Foods

Japan Earthquake & Tsunami

LOGO 9

Japan Earthquake & Tsunami

Tsunami is coming to Fukushima Nuclear Power Plant.

LOGO 10

Japan Earthquake & Tsunami

Tsunami is hitting Fukushima Nuclear Power Plant.

LOGO 11

Traffic and logistics network were seriously damaged .

Japan Earthquake & Tsunami

Swept Tourist Ship Swept Containers Tilted Crane Submerged Sendai Airport Damaged Shinkansen Station Damaged Road

LOGO 12

Thank you for your heartfelt support.

Japan Earthquake & Tsunami

“友”(TOMODACHI） MEANS

“FRIEND”

LOGO 13

Japan Earthquake & Tsunami

Infrastructure Restoration

Restoration Date Unserviced Term

Electricity ･20-25% was lost right after

the earthquake

･Gradual increase in

hydroelectric and thermal

power generation

Partial Restriction July - September

Sendai Airport April 13th(Partially Reopened)

July 25th(Fully Reopened)

33 Days

136 Days

Highway March 24th 13 Days

Railway

(Shinkansen)

April 29th (Back to Normal Service)

49 Days

LOGO 14

Effects on Japan Titanium Industry

●Sponge Producer

●Mill Producer

Tsunami-Affected Region

Fukushima Nuclear Power Plant

LOGO 15

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2009 2010 2011/4 2011/7 2011/10 2012/1 2012/4

Actual Production & Capacity

Production

Capacity

Working on boosting production capacity of Titanium Sponge Products

Outlook of Japan Titanium Industry 2011

LOGO 16

Outlook of Japan Titanium Industry 2011

2.0

2.5

3.0

3.5

4.0

'09 '10 '11 '12 '13 '14 '15

（1million ton/ year）

Demand

Supply（Current source）

Supply

Emergence of demand-supply gap

(New sourceincluded)

Demand-supply gap transition of high grade Ti Feedstock

Increasing of gap to be concerned

LOGO 17

Outlook of Japan Titanium Industry 2011

Rising price of Titanium Sponge Feedstock

100

150

200

250

300

350

400

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Feedstock Price (‘03=100 )

？

LOGO 18

0

5000

10000

15000

20000

25000

2008 2009 2010 2011

Shipments of Mill products

Others

Aerospace

PHE

Electrolysis

Desalination

Power Gen.

Chemical

1st Half

Outlook of Japan Titanium Industry 2011

Mill Products / Actual shipment of 2008 – 2010 and 2011 forecast

Forecast

LOGO 19

Factors in increase

Outlook of Japan Titanium Industry 2011

Plate Heat Exchanger Power Plant Parts Desalination Plant

LOGO 20

Topics: Japan Aeroforge Ltd. • Joint Venture to mainly manufacture aircraft forgings

– has been jointly established by:

Hitachi metals, Ltd.

Kobe Steel, Ltd.

IHI Corporation

Kawasaki Heavy Industries, Ltd.

• 50,000 metric ton forging press – Titanium, nickel and high alloy products for aircraft and

power plant

Outlook of Japan Titanium Industry 2011

LOGO 21

Outlook of Japan Titanium Industry 2011

Topics: Boeing 787 First Regular Flight

on November 1st

LOGO 22

<Titanium Industry>

• Titanium Sponge

– Working to boost production capacity as scheduled

• Mill Products

– Increasing production trend likely to continue

Conclusion

We will continue to make every effort to ensure stable supply of products to our customers.

・Almost no impact of the earthquake on the titanium industry