HIGHLIGHTS
- Russia may stop supplying titanium from VSMPO-AVISMA, the world’s largest titanium producer to US aircraft manufacturer Boeing if US sanctions are implemented.
- Volodymyr Zelensky, President of Ukraine banned the export of ilmenite to Russia, causing a shortage of ilmenite supply
- However, the Russia-Ukraine conflict has yet to affect the daily ferro titanium business in both countries.
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Sanctions and embargoes on raw materials: Threatening the titanium sponge market.
Russia’s VSMPO-AVISMA is the world’s largest titanium producer, with a capacity of 34,000 tons/year, supplying products to markets in 50 countries and closely linked with the global aerospace industry. In particular, it supplies the majority of titanium products used for aircraft shells by Airbus and Boeing.
Under an agreement signed this past November with Boeing, VSMPO “will remain the largest supplier of titanium for current and future Boeing commercial aircraft,” the Russian company said at the time. VSMPO-AVISMA has also signed 3 long-term agreements with Rolls-Royce for the period from 2016 to 2025, providing titanium products, semi-finished products and equipment made from titanium alloys, with a potential revenue in excess of 300 million dollars. Not only that, VSMPO also signed contracts with Spain’s Aernnova Aerospace until 2028 and UK-based Barnes Aerospace until 2026.
However, as tensions escalate, the titanium supply chain may be threatened. RIA news agency quoted Sergei Ryabukhin, head of the Russian upper house budget committee, as saying that Russia may stop supplying titanium to US aircraft maker Boeing if it proposes to retaliate against sanctions of the US is passed, which could directly affect Boeing’s supply chain.
European aerospace manufacturers Safran and Airbus recently re-examined their metals supply chains and sought new directions when purchasing Aubert & Duval. There are also sources of titanium from other manufacturers such as Toho Titanium in Japan, ATI Metals and RTI International Metals in the US. Even so, it is still very difficult to completely withdraw from VSMPO when VSMPO’s market share and product base are very large.
Limited Ilmenite supply increases competition for scrap
While international aerospace companies assess their access to titanium supplies from Russia, questions are also being raised about Russia’s access to the raw materials it uses to produce titanium – especially ilmenite imported from Ukraine when President Volodymyr Zelensky recently banned exports to Russia.
Under the stress of the ilmenite shortage, VSMPO tried to find vacuum scrap from traders. This has given new impetus to the search for alternative sources of raw materials from mines in Africa and created new activity in the already tight titanium scrap market.
Despite the impact on the scrap market, the Russia-Ukraine conflict has yet to affect the daily ferro titanium business in both countries. According to a Russian titanium manufacturer, the conflict is only psychological and emotional. “Everything is fine with us, we are working normally. In Ukraine, everything is calm, except for the fact that the tense situation is climbing the ladder”, Another Ukrainian ferro titanium producer also said.
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Russia – Ukraine war could have dire impacts on global supply chains
