Guess which ASX titanium share is rocketing 76% on a deal with Ford

A deal with Ford is putting a rocket under this ASX share.

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The Iperionx Ltd (ASX: IPX) share price is having a sensational day.

In morning trade, the ASX titanium share was up as much as 76% to a record high of $1.67.

IperionX's shares have since pulled back a touch but currently remain up 53% to $1.45.

Why is this ASX titanium share rocketing higher?

Investors have been scrambling to buy the company's shares today after it released a major announcement.

According to the release, the company has agreed a Scope of Work (SoW) with Ford Motor Company (NYSE: F) for the supply of titanium metal components to Ford Performance using its unique 100% recycled, low-carbon titanium metal.

Ford Performance is the high-performance and racing division of the Ford Motor Company. It is responsible for a range of performance cars such as the F150 Raptor, Bronco Raptor, Mustang Mach 1, and the Shelby GT500.

Management notes that the Ford SoW follows a detailed program of quality and strength testing of IperionX's low-carbon, circular titanium metal. Ford's Sustainability and Advanced Materials divisions undertook a range of testing procedures, verifying that IperionX's titanium surpassed the required parameters set under international standards.

What's next?

The release reveals that the titanium components are set to undergo a comprehensive "finishing study" to assess a range of potential surface finish of parts. The insights gained from this SoW will guide the final design, and unit costs, for a range of low-carbon titanium components for Ford Performance production vehicles.

IperionX's CEO, Anastasios Arima, said:

Ford has a commitment to achieve carbon neutrality by 2050. We are proud to partner with Ford to accelerate the deployment of a sustainable, circular titanium supply chain for the global automotive market. Our low-carbon titanium metal is uniquely made with 100% recycled titanium and can significantly improve automotive supply chains by using high-strength titanium components with nearly half the weight of steel.

IperionX is re-shoring a lower cost and more sustainable U.S. titanium supply chain – shifting from a linear supply chain to a lower carbon, circular titanium supply chain – recycling titanium scrap to manufacture low carbon, high performance titanium components. We are pleased that Ford has partnered with us to improve automotive supply chains and scale our low-carbon, circular, titanium business.

This ASX titanium share now has a market capitalisation of approximately $280 million. This means the announcement of the deal has added around $90 million to its valuation today. Whether this deal justifies that, time will tell.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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