The high price of oil is spurring demand for more fuel efficient engines. As airline accounts slide rapidly into the red, they demand both engine upgrades and new aircraft with engines that consume less fuel per passenger mile. Consequently, Rolls Royce and General Electric are drawing on military technology and using exotic minor metals like Rhenium to introduce super alloys that can run at higher temperatures and in the process use less fuel. As a result, Rhenium prices have soared to $11,250 a kilogram, more than double last year’s level and up from about $1,000 in early 2006. Rhenium is often obtained as a by-product of molybdenum production, with supplies coming from Chile and Kazakstan there is the possibility of supply disruptions and further increases in price. Chromium and cobalt have also been affected by the same demand from engine makers. Chromium rose this month to a record of $11,000 per ton, up from about $6,800 last year and less than $4,000 in 2000. Cobalt as we have reported previously
was at US$ 52/lb earlier this year although as we predicted prices have eased a little recently. Airlines are caught in the cross hairs between rapidly rising fuel costs, a fickle market that will shed demand if airfares rise and an uncertain economic future in terms of the global economy and demand for air travel. The one near-certainty is that fuel costs will stay high for the foreseeable future, even if the oil price drops back from $140 per barrel. So like it or not, airlines have to intensify the pace of aircraft upgrade as they struggle to remain profitable. Rhenium may have been the last naturally occuring element to be discovered but today it is certainly center stage in development of super alloys for aero engine makers.