Toho Titanium Sales Fall as Aerospace Inventory Correction Hits Sponge Demand

Toho Titanium

Toho Titanium sales fell sharply in the third quarter as aerospace customers continued drawing down inventories instead of ordering new titanium units. The company’s titanium metal sales in October-December dropped 21pc year on year to ¥13bn from ¥16.4bn. Sales for the first nine months also fell 19pc to ¥40.2bn. As a result, Toho Titanium sales now reflect a deeper inventory-led slowdown across the aerospace titanium chain.

This matters because titanium demand weakness is not coming from structural aerospace decline. It is coming from excess inventories built across the supply chain, from sponge to finished parts. That overhang has reduced the need for fresh titanium sponge purchases in 2025. Therefore, titanium sponge demand remains under pressure even while broader aerospace activity stays more resilient in other segments.

Toho’s wider business mix softened the blow, but not enough to offset titanium weakness. Total net sales for April-December reached ¥61.3bn, with catalysts and chemicals contributing part of that base. However, overall nine-month net sales still declined 7pc from a year earlier. Consequently, the titanium downturn remains the main reason the group’s broader sales picture weakened.

Aerospace Titanium Inventories Continue to Delay New Orders

Aerospace titanium inventories are still the core issue behind the current slowdown. Manufacturers across the chain are using existing stock instead of placing aggressive new orders. That pattern has limited demand for upstream titanium producers such as Toho. As a result, Toho Titanium sales are being constrained more by inventory correction than by end-market collapse.

The company’s guidance reflects that cautious environment. Toho maintained its full-year titanium metal sales forecast at ¥53bn. That implies fourth-quarter titanium sales of roughly ¥12.8bn, close to the third-quarter level. Therefore, management is not yet expecting a strong rebound before the fiscal year ends.

This suggests the market is stabilizing at a lower level rather than turning sharply higher. The inventory correction appears persistent enough to cap near-term recovery. Meanwhile, buyers are still waiting for supply chain balances to improve before resuming stronger raw material purchases.

Japan Titanium Market Faces a Slower Recovery Timeline

Japan titanium market conditions now point to a slower recovery than many suppliers would prefer. High inventories across aerospace are expected to persist until at least mid-2026. That means upstream titanium producers may continue facing muted order patterns for several more quarters. Consequently, titanium sponge demand may stay softer even if aircraft and engine activity improves elsewhere.

This split matters for interpreting the market correctly. Downstream aerospace repair and engine demand can stay firm while upstream sponge demand remains weak. The reason is simple: inventory must clear before new raw material buying accelerates. Therefore, Toho Titanium sales are acting as an early warning signal for how uneven the aerospace recovery still is.

The Metalnomist Commentary

Toho’s results show that titanium recovery is still being delayed by inventory, not by lack of long-term aerospace relevance. The market will likely improve, but upstream sponge producers may be among the last to feel it. Until inventories normalize, titanium demand will remain more cautious than aerospace headlines suggest.

Toho Titanium Weighs Options for New Titanium Sponge Plant

Toho Titanium Factory

Japan's Toho Titanium is contemplating the establishment of a new titanium sponge production facility, potentially in the US, Saudi Arabia, or Japan, as the company revealed to Metalnomist. This move is driven by the expected surge in demand from the aerospace sector, with original equipment manufacturers (OEMs) accelerating aircraft production.

Toho Titanium aims to finalize its decision on the project within this year, although specific locations and production capacities are still under review. While the company has not disclosed the capital expenditure (capex) or a construction timeline, market observers estimate that the investment required would be at least $300 million, with any new site likely taking around four years to become operational.

As a point of reference, Toho Titanium’s joint venture with Saudi firm AMIC, which resulted in a 15,600 t/yr sponge plant in Saudi Arabia, was announced in 2014, commenced construction in 2015, and began commercial production in 2019. The project involved an investment of $420 million.

Among the potential locations, Saudi Arabia is favored for its lower electricity costs. Toho is also considering the US, which would offer proximity to major titanium sponge consumers like Titanium Metals (Timet), ATI, Howmet, and Perryman. Alternatively, the company may expand its existing operations in Japan.

The acceptance of a Japanese sponge plant in the US is uncertain, especially after the opposition to Nippon Steel’s proposed acquisition of US Steel. Furthermore, in March, several US senators introduced a bill to suspend duties on titanium sponge imports, facilitating imports from Japan. This bill, supported by all four major US melters, suggests no immediate plans from Timet or ATI to restart idled domestic capacity at Henderson or Rowley.

Last month, Japanese titanium producer Osaka Titanium announced a ¥30 billion ($191 million) investment to build a new plant in Amagasaki, which will increase its titanium sponge capacity from 40,000 t/yr to 50,000 t/yr.

Investments from Toho and Osaka, along with continued procurement from Russia’s VSMPO-Avisma, could delay the anticipated deficit in the aerospace sponge market. The acceptance of Chinese sponge remains a contentious issue, with concerns about consistent production quality, especially given the industry's emphasis on quality and safety compliance.

Near-Term Challenges vs. Longer-Term Growth

The recovery in demand for widebody aircraft for international travel is set to be the primary driver of titanium consumption in the coming years. European firm Airbus aims to produce 12 aircraft per month by 2028 for its A350 program, while US firm Boeing targets 10 per month by 2026 for its 787 model.

In the short term, supply chains are struggling to match the recovering demand. Airbus CEO Guillaume Faury noted in the company’s April earnings call that although the issues are manageable on a case-by-case basis, the overall environment remains challenging.

Despite downstream production setbacks and persistent supply chain limitations, the demand for titanium sponge upstream remains strong. Melters, forgers, and parts manufacturers are increasing their inventories of titanium products in anticipation of higher demand in the latter half of the year.

Toho Titanium Reports Strong 1H24 Sales on Robust Titanium Demand

Toho Titanium

Toho Titanium Records Growth in Sales and Operating Profit

Japanese titanium producer Toho Titanium has reported a significant boost in its sales and operating profit for the six months ending September 30, 2024. The growth is attributed to strong downstream demand, particularly in the aviation, industrial, and semiconductor sectors.

The company achieved total sales of ¥43.8 billion ($284.9 million) during the period, marking a robust 19.7% increase from ¥36.6 billion in the same period of 2023. Operating profit also saw a modest increase, rising to ¥2.4 billion from ¥2.3 billion year-on-year.

Key Growth Drivers: Aviation and Semiconductor Recovery

Toho Titanium credited the steady demand for titanium in aviation and general industrial applications, alongside a recovery in high-purity titanium demand from the semiconductor industry. These factors propelled the company's titanium metal sales to ¥32.8 billion, a notable 19.8% increase compared to the ¥27.4 billion recorded in the first half of FY2023.

Additionally, the company’s catalyst business reported sales of ¥4.8 billion, a 29.7% year-on-year increase from ¥3.7 billion. Sales from the chemicals segment rose to ¥6.2 billion, up from ¥5.7 billion in the same period last year.

Positive Market Outlook for Titanium

The growth in Toho Titanium's financial performance reflects an overall recovery in demand for titanium across key sectors. High-purity titanium is a critical material in semiconductor manufacturing, an industry experiencing a resurgence following supply chain disruptions and increased global demand for advanced chips.

The steady aerospace demand further underscores titanium's indispensable role in lightweight, high-performance materials for modern aircraft. The company remains well-positioned to leverage these market trends to sustain its upward trajectory.

Japanese Titanium Producers See Profit Boost Amid Strong Aerospace Demand

Titanium

Japanese titanium producers reported a rise in profits during the April to December 2024 period, driven by strong aerospace demand. However, inventory adjustments appear to be starting to impact delivery schedules. Key players in the industry, such as Osaka Titanium Technologies and Toho Titanium, have benefited from favorable market conditions, particularly the depreciation of the Japanese yen. While sales for these companies grew, the overall market landscape is showing signs of shifting demand dynamics.

Osaka Titanium's Performance Amid Currency Fluctuations

Osaka Titanium Technologies recorded an operating profit of ¥8.4 billion ($54.9 million) for the period, supported by a weaker yen that made its products more competitive in foreign markets. Despite this, the company experienced a 3.8% year-over-year decline in total sales within its titanium business, which amounted to around ¥38 billion. A significant part of Osaka's growth came from titanium sponge exports, mainly destined for the aerospace sector. These exports rose by 2.7% year-over-year, reaching ¥26.9 billion.

Although exports remain the core of Osaka's business—accounting for 71% of total sales—the growth rate was lower than anticipated. This slowdown was partly due to customers completing their inventory restocking in the prior fiscal year, reducing orders during the April to December 2024 period. On the domestic front, sales of titanium sponge, which caters to general industrial use, fell sharply by 16.8% due to weak demand and ongoing inventory adjustments.

Toho Titanium Sees Growth but Revises Forecast

Toho Titanium also reported strong financial results, with operating profit for its titanium metal business almost doubling to ¥5 billion. The company’s total sales surged by 16.4%, reaching ¥49 billion, driven by solid export demand, particularly from the aerospace industry. Exports make up approximately 65% of Toho's titanium metal sales, reinforcing the importance of international markets to its business model.

However, Toho has revised its sales forecast for the current fiscal year, lowering it by ¥4.5 billion to ¥65.2 billion. The revision stems from weaker-than-expected titanium ingot sales for non-aerospace industries in Japan, which has been impacted by slower economic growth in China. Despite this, the company remains optimistic about its aerospace export demand, though inventory adjustments within the industry are causing a slight drag on overall purchasing activity.

Conclusion: A Mixed Outlook for Japan's Titanium Producers

Overall, Japan's titanium producers are experiencing a favorable profit outlook, mainly supported by strong aerospace demand. However, the effects of inventory adjustments and weaker-than-expected domestic demand for non-aerospace titanium products have led to more cautious expectations for the remainder of the fiscal year. Both Osaka and Toho are adapting to these market shifts, with an eye on maintaining profitability amid evolving global conditions.

Japanese Titanium Producers React to Boeing Disruptions

Osaka Titanium

The outlook for Japanese titanium producers in the current fiscal year (ending March 31, 2025) presents a mixed picture, primarily due to the recent labor strikes and quality control issues at Boeing. While some anticipate significant impacts on sales, others remain confident in their forecasts.

Osaka Titanium Technologies has revised its titanium business sales forecast downward by ¥3.5 billion ($22.8 million) to ¥49 billion. The company attributes this adjustment to a potential decline in titanium sponge sales stemming from the disruptions at Boeing. The seven-week strike by Boeing's machinists, which halted production of key jet programs, has raised concerns about broader impacts on the aerospace supply chain. Osaka Titanium expressed apprehension about further potential repercussions, echoing Boeing's own caution that operational stabilization will take time. Despite the lowered forecast, Osaka Titanium reported ¥26.2 billion in sales for April-September, a slight 2.8% year-on-year decrease. However, operating profit saw a substantial 59.3% increase to ¥6.3 billion.

In contrast, Toho Titanium maintains its initial sales outlook of ¥95.3 billion for the fiscal year, anticipating no significant impact from the Boeing situation. A Toho representative confirmed to Metalnomist that no order cancellations have occurred as a result of the Boeing issues. Furthermore, overseas sales volumes are secured under fixed contracts until the end of December, reinforcing the company's confidence in its forecast for the remainder of the fiscal year. Toho Titanium reported strong sales of ¥43.8 billion for April-September, a 20% increase year-on-year, with operating profit also slightly up at ¥2.4 billion.

Contrasting Strategies in a Volatile Market

The differing responses of Osaka Titanium and Toho Titanium highlight the complexities of the titanium market and its sensitivity to fluctuations in the aerospace sector. While Osaka Titanium has taken a cautious approach by revising its forecast, Toho Titanium’s existing contracts and order stability have allowed it to maintain its projections. The situation underscores the importance of supply chain resilience and diversified customer bases in mitigating risks associated with disruptions at major aerospace manufacturers like Boeing.

ATTM Titanium Sponge Operations Continue Despite Middle East Freight Risk

ATTM

ATTM titanium sponge operations remain normal despite rising logistics pressure from the war in the Middle East. The Saudi Arabian titanium sponge producer has reported no direct operational impact and does not expect material disruption to exports at this stage.

The company is a joint venture between Saudi group AMIC and Japan’s Toho Titanium. Its plant is located in Yanbu, on Saudi Arabia’s Red Sea coast, giving the facility strategic access to international titanium feedstock and export routes.

ATTM titanium sponge operations matter because the company supplies aerospace-grade titanium sponge to major Western markets, including the US, UK, France, and Italy. It also supplies ferro-titanium grades to Estonia, with smaller volumes shipped elsewhere.

Titanium Supply Chain Faces Freight and Feedstock Exposure

Regional freight markets have become more volatile as conflict disrupts shipping routes and energy-linked supply chains across the Middle East. Several aluminium production facilities have already faced production pressure because they could not secure imported feedstocks, energy supplies, or export access.

ATTM said it is actively managing logistics and does not anticipate material export disruption. This is important because Saudi Arabia imports most of its titanium ore and concentrate feedstocks from Mozambique and Australia.

ATTM titanium sponge operations therefore depend not only on plant performance, but also on inbound ore logistics and outbound sponge shipment routes. Any sustained disruption in freight availability, insurance costs, or port access could still affect titanium supply timing even if production remains stable.

Aerospace Sponge Output Remains Strategically Important

ATTM produced 12,000t of titanium sponge in 2025, compared with a nameplate capacity of 15,600 t/yr. That makes the company a meaningful non-Russian and non-Chinese titanium sponge source for aerospace and industrial customers.

The company’s relationship with Toho Titanium also strengthens its technical position. Aerospace-grade sponge requires strict control over chemistry, trace elements, and production consistency, making qualification and supplier reliability more important than spot-market availability.

For Western aerospace supply chains, stable ATTM titanium sponge operations provide reassurance during a period of geopolitical stress. However, the situation also highlights a broader vulnerability: titanium sponge supply remains concentrated in a small number of qualified producers, while feedstock logistics depend on long-distance maritime routes.

The Metalnomist Commentary

ATTM’s stability is positive for aerospace titanium buyers, but the real risk sits in logistics rather than furnace operations. Titanium sponge customers should treat Middle East freight disruption as a supply-chain risk that can emerge before production itself is affected.

China Aerospace-Grade Titanium Sponge Exports Set to Rise as OEMs Diversify Supply

China Aerospace-Grade Titanium Sponge

China aerospace-grade titanium sponge exports are expected to rise over the next five years as western aerospace supply chains look for additional qualified raw material sources. Chinese producer Chaoyang Jinda Titanium expects international shipments of qualified aerospace-grade sponge to increase from around 1,000t this year to 10,000t by 2030.

The shift reflects a deeper change in the aerospace titanium supply chain. Western aircraft manufacturers and ingot melters are trying to reduce exposure to Russian supply, while aircraft build rates are expected to rise from 2027.

China aerospace-grade titanium sponge is therefore moving from a limited export niche into a potential supply-chain balancing tool. However, tariffs, qualification risk and geopolitical uncertainty will limit how quickly US and European buyers adopt Chinese material.

The opportunity is strongest in standard-quality structural titanium grades. Premium-quality sponge for engine, landing-gear and other critical applications is likely to remain controlled by established suppliers with long qualification histories.

Western Aerospace Buyers Face a Supply-Diversification Challenge

Aerospace-grade sponge demand is expected to recover from 2027 after a weaker 2026 caused by inventory normalisation. Mills have been reducing stocks of semi-finished titanium parts and raw materials, but aircraft production plans point to higher requirements later in the decade.

The timing is important. Airbus and Boeing both carry long aircraft backlogs, creating a decade of production visibility. This forces mills and original equipment manufacturers to look beyond short-term demand swings and secure raw material sources for future build-rate increases.

Western OEMs also continue to reassess Russian titanium exposure. If procurement from Russia declines, the market will need alternative aerospace-qualified sponge to fill the gap. Japan’s Toho Titanium and Osaka Titanium are expanding, while China is preparing to supply more qualified material.

Global approved aerospace-grade sponge supply excluding Russian products is expected to rise from about 74,000t this year to around 91,000t by 2030. Demand is expected to grow at a similar pace, leaving the market sensitive to which suppliers are included in purchasing programmes.

The supply-demand picture changes significantly depending on China and Russia. Excluding both suppliers creates a tighter market. Including them creates more apparent supply availability. This makes qualification and geopolitical acceptability just as important as physical capacity.

Some US ingot producers began qualifying Chinese titanium sponge in 2024. US imports from China rose to a 10-year high of 1,069t that year, showing that buyers were willing to test Chinese material when diversification pressure increased.

However, imports fell to 155t last year and no Chinese sponge imports were reported in January-February 2026. Tariff volatility, high mill inventories and policy uncertainty discouraged further purchasing.

This shows the main barrier for China aerospace-grade titanium sponge. Aerospace qualification requires multi-year commitments, stable documentation, repeatable quality and customer confidence. Buyers will not qualify a new source quickly if they fear trade rules could change again.

Titanium is exempt from the latest 10% US tariff, and overall duties have fallen back to 40% from 60%. But the rate itself is not the only issue. For aerospace buyers, volatility can be more damaging than the actual tariff level.

A mill can absorb or price a known tariff. It cannot easily build a long-term qualification strategy around unpredictable policy. This is why US buyers may limit Chinese sponge procurement to 15-20% of requirements, even if the material is technically acceptable.

Europe and Asia-Pacific may offer more immediate export channels. China already supplies aerospace-grade sponge to buyers in those regions, supporting shipments even when US demand is limited.

Capacity Expansion Could Change the Titanium Sponge Balance

China is preparing a large wave of aerospace-grade sponge capacity additions. Several major projects are scheduled to come on line soon, with combined new capacity of around 110,000 t/yr.

The scale is unprecedented. The planned additions exceed the combined existing capacity of Japan’s Toho and Osaka Titanium, Kazakhstan’s Ust-Kamenogorsk Titanium and Magnesium Plant, and Saudi Arabia’s ATTM.

China’s expansion is driven by two demand streams. Domestic aerospace demand is rising from the Comac C919 programme and military aircraft production. At the same time, producers expect higher export demand as western OEMs diversify away from Russia.

China’s titanium mill product demand already has a meaningful aerospace base. Aerospace applications accounted for about 20% of China’s titanium mill product demand in 2025, or roughly 31,280t. The chemicals industry remained the largest segment at 48%.

The domestic base gives Chinese sponge producers a stronger platform for quality improvement. Aerospace production experience matters because sponge qualification depends on consistency over time, not only nameplate capacity.

Still, some market participants question whether all new capacity can secure international aerospace qualification. New lines may need years of operating history before western melters and OEMs accept material for aircraft applications.

This is a critical distinction. China may have large physical capacity, but aerospace supply depends on approved, audited and repeatable production. Capacity alone does not guarantee market access.

Price competitiveness may support adoption. Domestic China aerospace-grade sponge prices have recently held firm at 55,000-57,000 yuan/t ex-works because of cost pressure. That remains competitive against some western supply routes, especially if buyers need alternative non-Russian material.

However, qualification is likely to split the market by application. Standard structural titanium grades are more likely to accept Chinese sponge over time. These grades support airframes and less critical structural components where qualification remains strict but less restrictive than engine-grade applications.

Premium-quality sponge will be harder to penetrate. Engine, landing-gear and other demanding aerospace uses require deeper qualification, tighter chemistry control and stronger confidence from prime contractors and tier suppliers.

Airbus’ titanium demand outlook adds another layer. The A350 is a high titanium-bearing platform, with titanium representing around 15% of aircraft weight. As A350 production rises toward 2027 and 2028, titanium demand visibility should improve across the supply chain.

That demand pull could make Chinese material more attractive if western supply tightens. But buyers will still balance cost, qualification, geopolitics and supply security.

For Chinese producers, the path is clear but difficult. They must prove consistent aerospace-grade quality, build long-term customer trust, manage export documentation and navigate trade policy risk.

For western OEMs, the decision is strategic. China aerospace-grade titanium sponge could reduce Russia exposure and improve supply flexibility. But it also introduces another geopolitical dependency at a time when aerospace and defence supply chains are under closer scrutiny.

The most likely outcome is partial adoption. Chinese sponge may become a growing supplement for standard-quality structural grades, while established Japanese, Kazakh, Saudi and other qualified suppliers remain central to premium aerospace applications.

The Metalnomist Commentary

China aerospace-grade titanium sponge will become harder for western aerospace supply chains to ignore as aircraft build rates rise and Russian exposure narrows. The decisive issue is not capacity, but whether Chinese producers can convert new output into trusted, qualified and politically acceptable supply.

PTC Industries Secures Titanium Sponge Supply Deal with ATTM

PTC Industries

Strengthening India's Aerospace Titanium Supply Chain

Indian manufacturer PTC Industries has entered into a strategic titanium sponge supply agreement with Amic Toho Titanium Metal (ATTM) of Saudi Arabia. This partnership follows PTC's recent commissioning of a vacuum arc remelt (VAR) furnace, a move aimed at boosting India's titanium ingot production capacity.

Expanding Titanium Ingots Production in India

PTC’s subsidiary, Aerolloy Technologies, operates the newly launched VAR furnace, which boasts a 1,500 t/yr melting capacity. This advanced facility can produce aerospace-grade titanium ingots, a critical material for aviation, defense, and high-performance industries. The agreement with ATTM ensures a stable supply of titanium sponge, a vital raw material for ingot production.

Titanium sponge is melted alongside titanium scrap and master alloys, such as aluminum-vanadium, to form high-quality titanium ingots. However, India's domestic supply of titanium scrap remains limited, making imports from regions like Europe and Asia essential for a balanced melt mix.

ATTM’s Aerospace-Grade Titanium Expertise

ATTM, one of only four titanium sponge producers approved for aerospace applications, operates with a 15,600 t/yr nameplate capacity. This positions the company as a crucial supplier for PTC’s ambitions to expand India’s aerospace and high-performance titanium alloy capabilities.

By securing this agreement, PTC enhances its ability to meet the growing demand for high-quality titanium products, reducing reliance on fluctuating global scrap markets. The move aligns with India's vision of strengthening its aerospace and defense supply chains, reinforcing the nation's push for self-reliance in critical materials.

Aerospace OEMs Look to Reduce Dependency on Russian Titanium

VSMPO

Aerospace OEMs, including Airbus and Safran, are working to reduce reliance on Russian titanium as supply chain challenges grow due to rising tensions.

The Shift Away from VSMPO-AVISMA 

As global tensions escalate, aerospace original equipment manufacturers (OEMs) like Airbus and Safran are actively working to decrease their reliance on Russian titanium producer VSMPO-AVISMA. The urgency of this shift has heightened since Russian President Vladimir Putin’s recent call for export restrictions on critical metals like titanium, nickel, and uranium.

Airbus Multi-Sourcing Strategy

Airbus, a leading European aircraft manufacturer, is well-positioned in the short-to-medium term thanks to its diversified network of metal suppliers. An Airbus spokesperson told Metalnomist that efforts are underway to secure supply chain resilience through multi-sourcing strategies. However, Airbus has refrained from specifying a timeline for when it will completely sever ties with Russian suppliers.

Safran

Safran’s Progress Toward Decoupling 

French aerospace manufacturer Safran has been reducing its reliance on Russian titanium since February 2022. The company has made significant strides in qualifying alternative, non-Russian sources of titanium. According to a Safran representative, while the qualification of new suppliers takes 2-3 years depending on the complexity of the parts, the process is nearly complete. However, scaling up production to meet current demand remains a challenge across the industry.

Challenges of Securing Alternative Supplies 

VSMPO-AVISMA is the world’s largest titanium producer, and transitioning away from its supply chain has been a complex process for aerospace OEMs. One of the key obstacles is the exclusive contracts in place for critical parts like landing gear components, as well as the limited capacity for producing large-scale forgings and machining operations. Airbus acknowledged in October that it continues to honor its existing contracts in compliance with international sanctions, but reiterated its long-term goal of decoupling from Russian supply chains.

Boeing and the U.S. Response 

In contrast to Airbus, American aircraft manufacturer Boeing ceased all procurement from VSMPO-AVISMA in March 2022. Boeing also ended its forgings joint venture with the Russian company, Ural-Boeing Manufacturing. The U.S. has since imposed a 70% duty on titanium imports from Russia, further isolating the Russian supplier from the American market.

RTX

The Role of Nickel and Titanium in Aerospace 

Titanium plays a vital role in aerospace applications, including structural parts, fasteners, compressor blades, landing gears, and heat exchangers. Nickel, another metal facing export restrictions, is primarily used in high-temperature superalloys for the hot core of jet engines.

Global Sanctions and Industry Reactions The EU has yet to implement sanctions specifically targeting VSMPO, a move that contrasts with the more aggressive stance taken by the U.S. and Canada. Canada’s direct sanctions on VSMPO initially impacted companies like Airbus and Bombardier, but both received exemptions. U.S.-based RTX, however, faced complications and had to secure new titanium sources for its subsidiary, Collins Aerospace, which manufactures landing gear in Canada.

Future Prospects for Titanium Supply 

In response to the growing demand and the void left by VSMPO, U.S. titanium melters such as Timet, ATI, and Perryman are expanding their ingot melt capacities. Similarly, Japanese producers Toho Titanium and Osaka Titanium are investing in capacity expansion, though these efforts are expected to take several years to fully materialize.

Uncertainty Around Russian Export Restrictions 

Whether Russia will move forward with its export restrictions remains uncertain. Safran has stated it has no further information beyond Russia’s public statements, and Airbus has declined to comment on the matter. VSMPO’s largest shareholder, Industrial Investments, holds a 65.27% stake, while the Russian state-controlled defense firm Rostec owns 25%. Putin’s call for restrictions came with the caveat that they should not harm Russia, leaving the industry in a state of uncertainty.

Toho Titanium Sees Profit Surge Amid Strong Aviation Demand

Japanese titanium producer Toho Titanium reported a significant surge in earnings for the latest quarter, driven largely by robust demand from the aviation sector. The company's titanium business segment saw revenues and profits of approximately ¥15.9 billion ($109 million) and ¥1.3 billion, respectively, in the first quarter of its fiscal year, marking a 37.4% increase in revenue and a more than sevenfold rise in profit compared to the same period last year.

A Toho spokesperson attributed the growth primarily to strong demand from the aviation industry, noting that the company's production facilities operated at full capacity both domestically and internationally. "The run rate of the Saudi plant almost doubled from around 50% during the same period last year," the spokesperson said, referring to the company's joint venture in Saudi Arabia with Advanced Metal Industries Cluster (AMIC), which played a key role in boosting production.

The Saudi plant's production volume is reported to be around 15,000 tons per year, equivalent to the annual output at Toho's Wakamatsu plant in Fukuoka prefecture, Japan.

Toho also benefited from a weaker Japanese yen, which enhanced its price competitiveness in global markets. Despite the ongoing demand in the aerospace sector and increased production rates, the company stated that it does not plan to further raise its production outlook, citing already maxed-out operational capacity.

However, Toho maintained its financial outlook for the fiscal year ending March 31, 2025, anticipating a potential decline in titanium ingot sales for general industrial use due to weakening demand.

BTI titanium production start in 2026 reshapes Gulf titanium supply

Bahrain Titanium Factory Contract

Bahrain Titanium(BTI) titanium production start in 2026 moves closer as construction begins in Bahrain. The Interlink Metals unit reset the timeline from mid-2025 to early 2026. Stage one will produce 4,000 t/yr of CP slabs and 1,500 t/yr of 6Al-4V ingots. The BTI titanium production start in 2026 aims to supply industrial customers across the Gulf.

Stage one scope and target markets

BTI designed stage one to serve hard-wearing industrial systems. The mix covers chemical processing, desalination, marine, and power generation. As a result, CP slabs and grade-5 ingots should anchor reliable regional supply. Downstream users expect shorter lead times and reduced import risk.

Stage two, offtake, and feedstock strategy

BTI plans stage two to add billets and forgings with up to 10,000 t/yr capacity. Therefore, the company can target aerospace, medical, and defence demand. Letters of intent support early volumes from Interlink’s legacy Ukrainian customers. Meanwhile, the AMIC–Toho Titanium sponge LOI in Saudi Arabia remains active. BTI may also use Chinese sponge for non-critical industrial applications.

BTI is test-melting on a ferro-titanium furnace to widen its product slate. It is installing processing and crushing lines to feed that unit. Consequently, ferro-titanium production is slated to begin later this year. Bahrain’s US free-trade agreement further supports market access amid trade uncertainty.

BTI titanium production start in 2026 could rebalance Middle East titanium flows. The program introduces new slab and ingot capacity near end-markets. Moreover, the staged plan de-risks ramp-up while broadening alloy forms.

The Metalnomist Commentary

BTI’s sequencing is pragmatic: industrial first, certification-heavy segments later. Feedstock optionality across Saudi and China reduces sponge risk. Execution now hinges on qualifying forgings for aerospace and medical end-use.

Global Aerospace-Grade Titanium Sponge Supply Expands Despite Japanese Slowdown

Titanium Sponge

Higher utilization in Kazakhstan and Saudi Arabia offsets Japan’s decline as China eyes industrial market growth

Global Titanium Sponge Output Rises in 2024

Titanium sponge production from aerospace-approved suppliers grew in 2024, reaching 89,000 metric tons — a 6% increase from 2023. This rise came despite a production decline in Japan, which was balanced by higher capacity utilization in Kazakhstan and Saudi Arabia. The U.S. Geological Survey (USGS) and industry data confirm this upward trend, driven primarily by strategic expansion in the Middle East and Central Asia.

Japan's production fell to 55,000t in 2024, down from 57,000t in 2023. Inventory adjustments by domestic aerospace consumers were the primary cause. In contrast, Saudi Arabia's AMIC-Toho Titanium Metal ramped up output to 15,000t, nearing its 15,600 t/year capacity. Kazakhstan also maintained high utilization levels, strengthening its role as a stable sponge supplier for critical aerospace applications.

China Expands Industrial Market Footprint

While China’s titanium sponge remains unqualified for aerospace, its influence in industrial markets surged in 2024. Chinese production held steady at 220,000t, but capacity climbed to as much as 320,000 t/year, according to market participants. Japan’s imports of unwrought titanium from China rose sharply — from 451t in 2023 to 1,198t in 2024 — suggesting increased acceptance of Chinese sponge and ingot in industrial-grade production.

China’s growing presence is reshaping competition, particularly in Japan, where CP-grade metal demand dominates. Although Chinese sponge lacks aerospace certification, Metalnomist understands that select U.S. buyers are testing small volumes for future qualification — despite ongoing tariff uncertainties. The U.S. imported 1,068t of sponge from China in 2024, up from 154t the year before.

U.S. Aerospace Demand Softens Amid Boeing Constraints

U.S. titanium sponge imports from Japan declined in 2024 to 27,692t, down from 31,387t in 2023. This contraction reflects softer demand from American ingot melters due to lower-than-expected build rates for Boeing’s 787 Dreamliner and 737 Max programs. Persistent supply chain challenges further impacted intake, signaling a temporary slowdown in titanium conversion activity for aerospace.

Despite this, global titanium sponge markets remain dynamic. Kazakhstan and Saudi Arabia continue to play a vital role in balancing supply, while China's push into the industrial sector could eventually redefine global sourcing strategies.

PTC and Odisha Plan Titanium Sponge Facility

PTC Industries

PTC Industries and the Odisha government have signed an MoU to establish an aerospace-grade titanium sponge facility. This project aims to boost India's domestic titanium production.

Strategic Investment to Enhance Titanium Supply

While details on capacity, investment, and timeline are undisclosed, the facility will position PTC as an integrated titanium producer. The Odisha government is providing industrial ecosystem support and infrastructure incentives. This announcement follows PTC's commissioning of a VAR furnace in Lucknow and a supply agreement with AMIC Toho Titanium Metal (ATTM). India, with the third-largest ilmenite reserves, currently lags in titanium sponge production. The country relies on imports to support its growing aerospace sector.

Addressing India's Titanium Production Gap

Currently, India's titanium sponge production is limited to Kerala Minerals & Metals' 500 t/yr facility. This new facility aims to address this gap. For context, the ATTM joint venture in Saudi Arabia, with a 15,600 t/yr capacity, required approximately five years from announcement to commercial production and a $420 million investment.