Shares of titanium producers rise as Alcan CEO said company is interested in acquisition

Shares of titanium producers closed sharply higher Wednesday after the head of Canadian aluminium maker Alcan Inc. said his company is interested in acquiring a titanium producer to expand its product offerings for the aerospace sector.

Alcan makes aluminium composites used to manufacture many plane parts, but the aerospace sector is increasingly using titanium composites for key parts because of the metal's strength and relative light weight.

The titanium sector is dominated by triumvirate Allegheny Technologies Inc., Titanium Metals Corp. and RTI International Metals Inc.

Alcan "would be interested" in acquiring a titanium producer to address the shifting aerospace requirements, said CEO Richard Evans during a speech at the Bear Stearns Commodities and Capital Goods conference in New York.

But he cautioned that the timing may not be right because any speculation would drive a target's share price higher.

"The titanium universe is very small," Evans said. "I'm not sure this is the right time to be looking at that kind of an addition."

Investors still pushed shares of Allegheny Technologies Inc. higher on the comments. The stock also climbed after Allegheny's chief executive, who was speaking at the same conference, said he expects the company's high performance metals to continue to generate high profit margins.

Allegheny shares jumped $5.64, or 6.8 percent to close at $88.36 on the New York Stock Exchange, having reached a new 52-week high of $89.90 earlier in the session.

Titanium Metals rose $2.17, or 7.7 percent, to end at $30.42 on the Big Board. It has traded between $14.88 and $47.63 in the past year. Meanwhile, RTI shares added $3.56, or 5 percent to finish at $75.16 on the NYSE, where the stock has ranged from $36.81 to $83.33 over the past year.