Where will future aerospace-grade titanium supply come from?

Opinion Pieces




Where will future aerospace-grade titanium supply come from?

In recent years, global titanium metal supply has been in decline. The COVID-19 pandemic severely impacted commercial aircraft travel and disrupted supply chains, while the ongoing Russia-Ukraine war has created geopolitical pressures to find alternative titanium sources. 

Titanium metal is fundamentally underpinned by its use in aircraft frames and jet engines, where it provides a lightweight, high-performance alloy for several parts. Following Russia’s war with the Ukraine, Canada has imposed sanctions against the import of titanium from Russian producer VSMPO-Avisma and recent regulations in the USA limit the use of Russian-produced titanium for military applications. Despite these constraints, Canada has granted exemptions to both Airbus and Bombardier, and Europe continues to rely heavily on Russian supply, emphasising the global reliance on Russian aerospace-grade titanium. However, as titanium demand recovers from ongoing delays in the supply chain and concerns around Boeing’s MAX aircraft safety, where will future aerospace-grade titanium supply come from?

The history of Russian titanium: VSMPO-Avisma

The commercial production of titanium began with the development of the Hunter process in 1910 which was replaced by the Kroll process in 1940, where magnesium is used to reduce titanium. Due to its strength, corrosion resistance, and lightweight properties, titanium quickly gained popularity in the aerospace industry. For this reason, titanium was prioritised by the Soviet Union, with Russia’s titanium legacy rooted in the capabilities of producer VSMPO-Avisma. Established in 1933 as an aluminium producer, the company moved to the Urals and in 1957, produced its first titanium ingots for military aerospace and navy applications. Throughout the next couple of decades, the decline of the Russian military led VSMPO-Avisma to shift its titanium supply towards western customers in the aerospace industry, and consequently forming strategic partnerships with Boeing and Airbus. By 2003, VSMPO-Avisma held 185 production certificates for all major aerospace production companies, solidifying the company as a key player for titanium supply in the aerospace industry.

Recent developments: Chinese growth, Russian-Ukraine war and US production loss.

Over the past two decades, China has significantly grown its titanium sponge capacity, the feedstock for titanium metal, with more production of both sponge and metal accelerating since 2018 to capture over 50% of global titanium metal production. Companies like Zunyi Titanium Industry and the Baoti Group have significantly expanded their respective capacities to 30ktpy through strategic investments, technological developments, and industrial restructuring. Despite this large-scale growth of titanium sponge capacity in China, the country is still developing its aerospace-grade titanium production capabilities, with its surging metal output still focused on industrial grades. China’s COMAC delivered its fifth C919 aircraft in January this year with the model raking up 100s of orders over the first half of 2024 already. With China’s aspirations to ramp up production of its aircrafts and launch a jet engine programme, a strategic shift to aerospace-grade titanium production would accelerate COMAC’s position to challenge the Airbus-Boeing duopoly. However, recent reports have also suggested the influx of counterfeit Chinese titanium into the aerospace supply chain via forged paperwork, placing scepticism on Chinese-produced titanium at a time when safety certificates are under the lens.

In 2020, the COVID-19 pandemic severely impacted the titanium supply chain and with low demand already in place following the fatal crashes of two Boeing flights in 2018, there was little price support for marginal producers to remain in operation. Production in the USA was already under pressure from rising Chinese competition, and with the closure of both ATI’s Rowley plant and Iluka Resources’ Virginia plant in 2016, and TIMET’s Henderson plant in Nevada in 2020, saw all large-scale domestic production of primary titanium lost in the USA. As a result, the US is now wholly reliant on the import of titanium sponge feedstock and recycling to meet its domestic titanium demand.

The Russian-Ukraine war that was initiated in 2022 is also adding to the woes of the titanium industry. Both Russia and Ukraine produce titanium sponge, however, production has been diminished owing to the ongoing conflict.  Historically, large heavy mineral sand deposits in Ukraine have been exploited as raw material feedstock for Russia’s titanium industry. Trade data shows that these feedstock imports to Russia have stopped, yet reports have suggested that material is still making its way to Russia via intermediaries, albeit at lower volumes than previously recorded. This means that the aerospace titanium metal supply in Russia will be digging into available stocks as demand recovers. Furthermore, geopolitical pressures, as those outlined above for Canada and the USA, have been building to reduce dependency on Russian titanium and to find alternative sources, given that titanium from Russia has been associated with the Russian defence conglomerate Rostec. Despite these geopolitical pressures and sanctions, Russian titanium sponge and metal continue to reach Western markets. Owing to limited alternative sources a recent increase has been seen in Chinese titanium metal supply to supplement demand.

The sourcing of aerospace-grade titanium sponge and metal is further exacerbated by the prolonged process of certifying and integrating alternative sources into the various aerospace supply chains, currently leaving the aerospace industry dependent on titanium imports from Russia. 

New supply chains: Middle East, North America, and China.

Consumption of titanium in the aerospace industry is forecast to grow by a CAGR of 7% over the next decade, more than doubling to 132kt by 2034. This is mainly driven by the rapid recovery of the travel industry, which is projected to surpass its 2018 peak by 2026. Some of the supply decline has been met by Saudi Arabia’s Yanbu plant which commenced titanium sponge production at the end of 2019 and has been focused on expanding its capacity. This new supply has been consumed by both the US and Europe. In an effort to become a leading titanium producer, Saudi Arabia has taken several steps to place itself as a strategic supplier to the aerospace industry. This includes a signed agreement with Airbus and Boeing to collaborate on titanium supply chain developments, and a supply agreement with Bahrain Titanium, a subsidiary of Switzerland-based Interlink Metals, which plans to develop a titanium melt plant in Bahrain.

In order to stimulate and resume its domestic titanium supply chain as a matter of national security, the US government has also initiated several programmes through the Department of Defence (DoD). These include the Defence Production Act Investment (DPAI) programme which aims to create resilient domestic supply to reduce reliance on foreign manufacturing, and the Manufacturing Technology (ManTech) programme which aims to identify technological gaps to advance manufacturing and ensure rapid development. Additionally, US titanium projects being developed by IperionX, Norsk Titanium in collaboration with Northrup Grumman, and Universal Achemetal Titanium (UAT) have seen funding grants towards the overarching goals of the DoD. Projects that are in line with national security goals also include that of magnesium metal producers such as Magrathea, as magnesium metal is used in titanium production. US senators have also initiated the Securing America’s Titanium Manufacturing Act which aims to remove a 15% tariff that is currently placed on titanium sponge imports from strategic partners such as Japan. Additionally, the US and Japan recently concluded a strategic partnership, the US-Japan Defence Industrial Base Working Group, under which the two countries will collaborate on securing supply chains for critical defence materials. Towards this goal, Japan has also announced that its titanium producers are exploring expansion projects, with Toho Titanium and Osaka Titanium aiming to boost capacity, a strategic move to position itself as a significant producer of titanium.

Although the US has made several strategic investments towards securing a domestic titanium supply chain, the majority of existing projects will still require a titanium sponge feedstock. Therefore, Japan and the Middle East represent key development zones where titanium sponge capacity growth will allow for opportunities to expand into the aerospace industry.

Notably, the end of the Russia-Ukraine conflict will also likely see the return of aerospace-grade titanium metal. Given the development of the Chinese commercial aviation sector and China’s aspirations for a homegrown aircraft manufacturer with the debut of the COMAC C919, China will look to develop an extensive aerospace-grade titanium supply chain. Ongoing sanctions on Russia from the West and new supply chain agreement discussions between China and Russia could see aerospace-grade titanium supply redirected away from the aerospace duopoly and support COMAC’s plans to scale up production. Should the international aerospace community accept and certify Chinese-produced aerospace-grade titanium, this may represent an upside scenario for future aerospace supply, but likely also further support COMAC to capture market share in the booming Asian air travel market.