DFS what to expect, page-46

Projecting scandium demand. From Seeking Alpha article:

"Here, we need some basic economic insight, which is different from specialized financial insight. It was Frédéric Bastiat who taught us that economics is not only to look at the seen (bookkeepers), but especially to look at the unseen (economists). The profits from using Scandium alloys, namely, do not merely come from the ability to use less aluminum alloy when it is alloyed with scandium, but from a consequence that is unseen: because Sc-Al allows the welding of aluminium. Right now, this is a very hard thing to do, which is the reason why traditional aircraft still uses thousands of rivets to fasten aluminum aircraft together.

Now, imagine, for a moment, what the elimination of these rivets actually comes down to? A further factor of weight reduction? No, that is still thinking like a book keeper. The unseen factor the market still does not factor in is that when rivets are no longer needed, aircraft will not merely become lighter, but that its production can be revolutionized completely. If the Scandium alloy production can be brought up to speed (the main problem with that is addressed in section six), assembly lines will look a lot more like Tesla-production-facilities: a lot of robots welding, and a lot less labor required.


A typical single aisle jetliner, such as an Airbus A320 or a Boeing 737, has a dry weight (the weight of the aircraft before it is fitted out by the airline) of 45-50 tonnes. Perhaps 80% of that weight is aircraft aluminum. Scandium alloys can reduce this weight by an estimated 15-20%, or 6-10 tonnes, according to Airbus (OTCPK:EADSY). Assuming that the Al-Sc alloy needs 1% scandium, each aircraft would contain about 400 Kgs of scandium oxide, worth about $1.4 million at current market prices.
That is the "commodity" investment an Airbus would have to make. However, based on estimates by The Economist, the lifetime value of fuel savings would total anywhere between $20 million and $30 million. ....because of the "application specific value" mentioned before, a portion of the savings airline companies will be able to make will be incorporated in the buying price companies like Airbus or Boeing (NYSE:BA) will be able to ask for their jets.

The value ratio can be larger if a lower scandium loading can be used to achieve the desired performance, as is being promoted today by for instance Aleris. This means, of course, that less Scandium will be used per plane, which could lead one to conclude that this is actually bad for the Scandium price. But that is thinking like a bookkeeper. The fact is that the production cost of a plane will go down substantially, enabling more planes to be built for the same price. That is thinking like an economist."