Russia-Ukraine Conflict Threatens Titanium Supply Chain

Titanium alloys were successfully developed in the 1950s, and are widely used in various fields because of their high strength, good time resistance, strong heat resistance, and light weight.

The earliest use of titanium alloys in the military field are mainly military powers such as the United States and Russia.

Titanium tubes have a very wide range of uses in the military industry. Nuclear-powered submarines, hydrofoils, mortar barrels, anti-tank missiles, missile launchers, tank shields, bulletproof vests, etc. use a large number of titanium tubes.

The escalating conflict between Russia and Ukraine has triggered market concerns about the titanium supply chain, mainly because Russia and Ukraine are the main suppliers of titanium. Except for a small amount to meet domestic demand, most of the exports provide global customers with sponge titanium or titanium materials. Once the situation deteriorates, in addition to the impact of titanium production in the region, subsequent sanctions from Europe and the United States will likely limit the export of Russian titanium metal, which will lead to tight supply of titanium metal in the market and trigger panic purchases and hoarding by downstream buyers. At present, the price of magnesium ingot, the main raw material of titanium metal, remains high, coupled with severe global inflation and the sharp rise of other non-ferrous metals, copper, aluminum and nickel, the price of titanium metal will likely rise.

Russia Avisma (VSMPO) is the world's largest titanium sponge producer with an annual production capacity of 34,000 tons per year. A major supplier of the titanium used in Airbus and Boeing aircraft skins is the company that supplies a significant portion.

The Ukrainian Zaporozzi Titanium and Magnesium Joint Enterprise is a titanium sponge factory with an annual production capacity of 12,000 tons. It will export 1,527 tons of titanium sponge to China in 2020, accounting for 32.34 percent of China's total imports of titanium sponge.

Due to the complex smelting technology and the difficulty of processing, only the United States, Russia, Japan and China have mastered the complete titanium industrial production technology in the world at present, forming a pattern in which the top four dominate. In addition, although there is no sponge titanium industry in Europe, the titanium processing and application technology is at the world's advanced level. Ukraine and Kazakhstan inherited part of the former Soviet Union's titanium sponge industry. Baoti's titanium products occupy the first place in the domestic market, and its output ranks second among similar enterprises in the world. It is one of the four major international titanium and titanium alloy processing enterprises.

In 2020, China's export volume of titanium sponge was 548.5 tons, a year-on-year decrease of 47.6 percent . The import volume of titanium sponge in China was 4,722.6 tons, a year-on-year decrease of 33.9 percent .

Among them, in 2020, the import volume of China's titanium sponge to most countries is Kazakhstan, with an import volume of 2,310 tons, accounting for 48.91 percent of China's total import of titanium sponge; followed by Ukraine's import of titanium sponge with a volume of 1,527 tons, accounting for China's total import of titanium sponge The volume was 32.34 percent ; again, Japan imported 800 tons of titanium sponge, accounting for 16.94 percent of the total imported titanium sponge in China.