Ukraine’s Titanium Industry Moves Towards Privatization with $95.6 Million UMCC Sale

UMCC

In a major step in Ukraine's titanium sector privatization, the State Property Fund of Ukraine auctioned United Mining and Chemicals Company (UMCC) for 3.94 billion UAH (approximately $95.6 million). Tsemin Ukraine acquired UMCC, pending approval from Ukraine's Cabinet of Ministers. This sale is part of Ukraine’s broader effort to privatize key titanium assets, aiming to enhance the sector’s productivity and independence amid ongoing economic challenges.

The sale agreement stipulates that Tsemin Ukraine must maintain UMCC’s operations, invest a minimum of 400 million UAH in technical modernization, and resolve any outstanding debts, including wages. As one of the world’s largest titanium producers, UMCC manages the Irshansk and Vilnohirsk Mining and Processing Plants, producing over 500,000 metric tonnes annually. The company has recently strengthened its European market position by resuming ilmenite concentrate shipments, contributing to a more stable supply of titanium materials within the continent.

VSMPO Titan and ZTMC Also Slated for Privatization

Alongside UMCC, Ukraine is preparing to privatize additional titanium-related assets, including VSMPO Titan Ukraine and the Zaporizhzhia Titanium-Magnesium Combine (ZTMC). VSMPO Titan Ukraine, which specializes in seamless titanium pipes, was seized from Russian oligarch Mikhail Shelkov in 2023. Meanwhile, ZTMC, under state control since 2020 after the government took it from Group DF owned by Dmitry Firtash, is positioned for new investment and modernization through privatization efforts.

The State Property Fund is also evaluating options for the Zaporizhzhia Titanium Institute after an initial auction failed to secure a buyer. This focus on privatizing titanium assets underscores Ukraine’s commitment to revitalize and safeguard its strategic metal production industry amid heightened demand and geopolitical pressures.

Enduring Reliance Amid Sanctions: Europe’s Russian Titanium Dilemma

VSMPO Titanium

Introduction: A Supply Chain Unbroken in Wartime

Despite sweeping economic sanctions imposed by the West following Russia’s invasion of Ukraine in February 2022, one supply chain has proved remarkably resilient: Russian titanium sponge. Europe’s quandary over this advanced material—indispensable to aerospace, defense, and medical-device manufacturing—has only deepened.

Russia’s Command of Titanium

Russia ranks among the world’s largest titanium producers. VSMPO-AVISMA, the country’s flagship producer, accounts for 90% of Russia’s titanium output and exports to some 50 countries. The company is estimated to control up to 30% of the global titanium market and nearly half of aerospace-grade supply.

Russia’s dominance rests on abundant raw-material reserves and comparatively low energy costs. Because titanium smelting is energy-intensive, commercial viability depends on cheap power and gas—conditions Russia has historically met.

Airbus A380

Trade that Continues Despite Sanctions

On 7 March 2022, Boeing announced it would halt purchases of Russian titanium used in aircraft manufacturing. Rolls-Royce and Boeing subsequently suspended procurement from VSMPO-AVISMA indefinitely.

Europe, however, charted a different course. Airbus urged the European Union to keep Russian titanium outside future sanctions packages. As Airbus chief executive Guillaume Faury argued, titanium represents a small share of Russia’s total exports, so sanctions would inflict little pain on Moscow while dealing a heavy blow to Europe’s aerospace industry.

Today, Airbus still sources roughly half of its titanium from VSMPO-AVISMA. Boeing, by contrast, once relied on Russia for about one-third of its titanium but has since stopped buying Russian material.

The Limits—and Exceptions—of EU Sanctions

Notably, while the EU has restricted imports of Russian steel and coal, titanium has not been sanctioned. The metal remains a strategic material used in fuselages, turbine blades, satellites, and other critical systems.

Dependence on Russian metals endures in other segments as well. From March to June 2022, combined EU-US imports of Russian aluminum and nickel rose to $1.98 billion—more than 70% above the prior-year period.

Washington and Brussels have generally refrained from designating industrial metals as sanction targets. Europe continues to import large volumes of Russian natural gas, and Russia supplies about 40% of global palladium—vital for semiconductors—implicating everything from automobiles to smartphones.

CBAM

CBAM: A New Variable

The EU’s Carbon Border Adjustment Mechanism (CBAM), introduced in October 2023, adds another layer of complexity. CBAM initially covers cement, electricity, fertilizers, iron and steel, aluminum, hydrogen, and certain downstream products in steel and aluminum. After a transition phase through 2025, full implementation begins in 2026, imposing carbon costs on imports equivalent to those borne by EU producers.

While fertilizers, cement, hydrogen, and non-exported electricity may see limited near-term impact, aluminum stands out as a key target sector. Most exports to the EU beyond steel and aluminum are not yet covered, though the European Commission has signaled possible expansion to high-leakage categories such as organic chemicals and plastics.

Russia is structurally disadvantaged under CBAM. Steel production in Russia, Ukraine, and Türkiye tends to be more carbon-intensive, implying higher embedded-carbon costs at the border.

Ambiguities in Sanctions and Industry’s Dilemma

The United States placed VSMPO-AVISMA on its “military end-user” list, restricting access to advanced technologies, but stopped short of a direct ban on titanium sales—an acknowledgment of global industry’s reliance on the material.

Indeed, during the early stages of the war, VSMPO-AVISMA avoided sweeping US and European sanctions. Although Washington temporarily listed the company in December 2020, the measure was later rescinded.

Recent moves, however, suggest a tightening environment. In April 2024, a joint US-UK action prompted the CME and LME to prohibit trade in newly produced Russian aluminum, copper, and nickel dated after 13 April—an effort widely read as constraining Russia’s influence in metals markets.

Ukraine Titanium Mine

Ukraine: A Viable Alternative?

Against this backdrop, Ukraine has emerged as a potential alternative. Until 2020, the country supplied 90% of Russia’s ilmenite—the feedstock for titanium sponge. With that supply chain severed by war, Ukrainian resources could help challenge Russia’s dominance.

US companies have begun talks with Kyiv on a joint venture anchored by the Zaporizhzhia Titanium-Magnesium Plant (ZTMP). Such partnerships could forge a new titanium hub in Eastern Europe, strengthening Ukraine’s economic footing for decades.

The risks are significant. Ongoing conflict and occupation threaten both Donbas deposits and the ZTMP facilities, which remain exposed to shelling and sabotage.

Aviation’s Growth—and Its Dilemma

The aerospace-titanium market was valued at roughly $100 million in 2022 and is projected to grow at a CAGR exceeding 5% from 2023 to 2032—reflecting the rebound in air travel and a pipeline of commercial aircraft programs.

Despite supply-chain turbulence from war, energy constraints, and labor shortages, passenger traffic continues to recover, lifting titanium demand. In October 2022, Airbus announced plans to deliver more than one aircraft per week to India, persisting with expansion despite engine-supply challenges and domestic carrier capacity constraints—developments that further complicate titanium sourcing.

The Reality of Diversification

Boeing reportedly began diversifying away from Russian titanium after the 2014 annexation of Crimea. Airbus, by contrast, remains heavily reliant on Russian supply.

Globally, China produced around 100,000 t of titanium in 2013—twice the combined output of Russia and Japan at the time—making it the world’s largest producer. Japan ranked third, with Osaka Titanium Technologies standing as the world’s second-largest producer of titanium sponge.

The Metalnomist Commentary: An Unfinished Dilemma

Europe’s struggle over Russian titanium sponge epitomizes the knotty realities of modern supply chains. Between economic sanctions and security imperatives, between industrial competitiveness and moral principle, Europe has yet to find a definitive answer.

With CBAM’s full force arriving in 2026, higher carbon-cost pass-throughs on Russian metals seem likely, intensifying pressure to rewire supply. Yet, as Airbus’s position illustrates, displacing Russian titanium in the short term remains daunting.

The gap between industrial necessity and political sanction endures—witness VSMPO-AVISMA’s August 2025 statement that it stands ready to resume cooperation with Boeing. For now, Europe must navigate this dilemma with prudence: balancing sanction principles, industrial realities, and emergent environmental rules—while accelerating the use of recycled titanium wherever feasible.

EU Russia Sanctions Face Delay as Hungary Links Veto to Druzhba Oil Flows

Hungary

EU Russia sanctions are facing another political delay after Hungary signalled it would block the bloc’s 20th sanctions package unless Ukraine allows Russian crude flows to resume through the Druzhba pipeline. The dispute shows how energy security, foreign policy, and sanctions enforcement remain tightly connected inside Europe’s wartime decision-making system.

The proposed package would expand pressure on Russia’s energy and maritime networks. However, Hungary’s position has shifted attention away from the package itself and toward crude supply interruptions affecting Hungary and Slovakia. Pipeline deliveries through Druzhba have been halted since 27 January after an attack on a pumping station in Ukraine.

The standoff highlights a deeper weakness in EU Russia sanctions policy. The bloc is trying to tighten restrictions on Russian trade while still managing member states with different exposure to Russian energy infrastructure. As a result, sanctions decisions remain vulnerable to national energy concerns and political bargaining.

Druzhba Dispute Tests EU Sanctions Unity

Hungary’s veto threat has frustrated other EU members because its objections are not directly related to the content of the sanctions package. Budapest says it will not support decisions important to Kyiv until Ukraine resumes oil transit to Hungary and Slovakia through Druzhba. That position has drawn criticism from Germany and Poland, both of which have called for stronger solidarity with Ukraine.

The disagreement also follows Hungary’s move to block a €90bn EU loan for Ukraine. This widens the dispute from sanctions policy into broader financial and diplomatic support for Kyiv. For Brussels, the issue is not only whether one package passes, but whether the EU can preserve a credible common front.

EU Russia sanctions require political cohesion as much as legal design. When one member state uses veto power over unrelated disputes, it weakens the predictability of the bloc’s sanctions process. That uncertainty matters for energy traders, shipowners, insurers, ports, and industrial buyers exposed to Russian-linked commodity flows.

Maritime Restrictions Could Expand Pressure on Russian Trade

The proposed 20th package appears to move deeper into maritime enforcement. Earlier negotiations had already faced resistance from maritime nations such as Malta and Greece, while Cyprus has been chairing the talks. The package reportedly includes a ban on maritime shipping services and restrictions affecting non-Russian ports for the first time.

This would mark an important escalation in EU Russia sanctions. Targeting maritime services can affect shipping access, insurance, port calls, and logistics linked to Russian crude and other commodities. It also raises the compliance burden for companies operating across complex trade routes where cargo origin, ownership, and service providers may be difficult to verify.

The draft package also includes Russia’s crude ports at Murmansk and Tuapse. That would strengthen the EU’s effort to restrict Russia’s ability to move energy exports through established seaborne channels. However, the bloc’s challenge is clear: stronger maritime sanctions are only effective if member states can align policy, enforcement, and commercial risk management.

The Metalnomist Commentary

The Hungary veto shows that sanctions policy is now part of Europe’s wider energy-security architecture. The industrial risk is that fragmented politics can slow enforcement just as Russia-linked commodity flows become harder to monitor.

China’s Titanium Sponge Exports Surge While Imports Decline in 2023

Titanium Sponge

China’s Titanium sponge exports saw a significant increase during January-September 2023, driven by heightened demand from countries like the United States, Japan, and South Korea amid the ongoing Russia-Ukraine conflict. However, imports into China decreased due to ample domestic availability and declining local prices, which remained highly competitive compared to international markets.

Export Trends: Rising Demand from the U.S. and Japan

During the first nine months of 2023, China exported 4,362 tons of Titanium sponge, reflecting a 24% increase compared to the 3,516 tons shipped during the same period in 2022, according to customs data. This surge was largely fueled by reduced global spot supplies following the start of the Russia-Ukraine conflict in February 2022. Russia and Ukraine are significant producers of Titanium sponge, alongside other nations such as Kazakhstan, Saudi Arabia, and Japan.

In September 2023, exports totaled 567 tons, a 38% rise from the 411 tons shipped in September 2022. However, this was a 24% decline from the 744 tons exported in August. Key export destinations included Japan (224 tons), the United States (100 tons), and Sweden (60 tons). A notable contract by a Yunnan-based producer to supply 1,000 tons of 99.7% sponge to a U.S. buyer, with shipments scheduled for May 2025, highlights China’s growing footprint in the global Titanium sponge market.

Import Decline: Sufficient Domestic Supply and Competitive Pricing

China’s Titanium sponge imports fell by 25%, with only 100.4 tons brought in during January-September 2023, compared to 133.7 tons in the same period in 2022. The decline is attributed to adequate domestic availability and weaker prices in the local market. The average price for 99.7% grade Titanium sponge in China during the period was ¥50,712 per ton (approximately $7.10 per kg), significantly lower than the European average of $11.45 per kg.

Domestic Market Stability Amid Thinner Margins

Despite rising exports, China’s domestic Titanium sponge market remains stable, though profit margins have thinned, with some producers operating at a loss. Prices for 99.7% grade sponge as of early November were assessed at ¥43,000-44,000 per ton ex-works, the lowest levels since February 2016. Similarly, 99.6% grade sponge was priced at ¥42,000-43,000 per ton ex-works.

Producers in regions such as Panzhihua have also shifted focus to export markets, including India and Europe, to compensate for declining domestic profitability. Notably, the continued suspension of production by Ukraine’s Zaporozhe Titanium and Magnesium (ZTMC) since February 2022 has further solidified China’s position as a key supplier to international markets.

Outlook: Competitive Advantage Amid Global Supply Constraints

China’s robust export growth underscores its critical role in the global Titanium sponge market, especially in light of supply disruptions caused by geopolitical factors. Competitive pricing and stable domestic production ensure that China remains a leading supplier, even as other producers face challenges in meeting global demand.

EUROFER Revises 2024 EU Steel Consumption Forecast Downwards

The European Steel Association (EUROFER) has revised its 2024 steel consumption forecast for the European Union, citing an array of economic challenges. These include the protracted period of elevated interest rates, the ongoing conflict between Russia and Ukraine, resultant energy crises, inflation, labor shortages, and supply chain disruptions in the Red Sea region due to the Israel-Palestine conflict.

In its recent "2024-2025 Economic and Steel Market Outlook" report, EUROFER predicts a modest 1.4% year-over-year increase in nominal steel consumption within the EU, reaching 127 million tons in 2024. This is a notable downward adjustment from the previously anticipated 3.2% increase to 130 million tons.

The report also recalibrates the 2025 forecast, lowering the expected growth from 5.6% to 4.1%, thereby predicting a total consumption of 133 million tons, down from the prior forecast of 137 million tons.

The first quarter of 2024 witnessed a 3.1% decline in EU nominal steel consumption year-over-year, totaling 31.9 million tons. This early-year contraction is expected to dampen the forecasted recovery for the remainder of the year. Significant uncertainties persist in steel consumption due to supply chain disruptions linked to the ongoing geopolitical conflicts, unprecedented surges in energy prices, and escalating production costs. Despite a gradual anticipated improvement towards the year's end, actual steel consumption is projected to remain below pre-pandemic levels.

EUROFER has also adjusted growth projections for steel demand industries downward. The Steel Weighted Industrial Production (SWIP) index fell by 1.9% in the first quarter of 2024, a stark contrast to the previous quarter's 0.5% rise. The decline in production across the EU’s steel-using sectors is attributed to the sustained impact of the Russia-Ukraine war, pervasive manufacturing weaknesses, global geopolitical tensions, and the long-term repercussions of the energy crisis.

The SWIP index decline highlights a persistent downturn in the construction, machinery, appliance, and metal product sectors, partially mitigated by continued growth in the automotive sector. The construction sector, which constitutes 35% of EU steel consumption, has been in recession since the third quarter of 2022, declining for seven consecutive quarters (-2.3%) through the first quarter of this year. High interest rates, labor shortages, and escalating material prices are expected to perpetuate the construction sector's downturn throughout the year.

The report states, "The positive trend in steel demand industries, which commenced post-pandemic, began to decelerate from the second half of 2022 due to rising energy costs and labor shortages following the Russia-Ukraine conflict, continuing through the fourth quarter of last year. This year’s deteriorating economic and industrial outlook for the EU is driven by high inflation and resultant interest rate hikes by the European Central Bank (ECB), with particularly adverse effects from the prolonged construction sector recession, ongoing geopolitical tensions, and worsening manufacturing conditions due to high interest rates."

The report continues, "Amid persistent adverse factors, the growth rate for steel demand industries is expected to decline to -1.6% in 2024, down from the previous forecast of -1%, with a rebound to 2.3% anticipated in 2025."

Notwithstanding the lowered forecasts for steel consumption and demand industries, import volumes have risen. According to the report, EU steel imports, including semi-finished products, increased by 12% year-over-year in the first quarter, mirroring the previous quarter's 11.3% rise.

Axel Eggert, EUROFER's Secretary General, emphasized, "While the EU's steel demand industries face a protracted downturn due to various adverse factors, import market share has risen significantly. This jeopardizes both European steel production and the associated clean technology value chains, necessitating urgent action at the EU level. The European Commission must swiftly conclude a European Clean Industry Agreement focused on the steel sector."

Velta Secures $2M Loan from Traxys to Restart Titanium Production

Velta Titanium Mining

Financing Enables Modernisation of Ukraine’s Birzulivske Ilmenite Deposit

Velta secures $2M loan from Traxys to carry out capital repairs and restart production at its Birzulivske titanium deposit in Ukraine. The Luxembourg-based trading company provided pre-export financing to help modernise Velta’s operations, which had paused from 2022 to 2024 due to the redirection of funds to wartime support efforts. The financing will enhance production efficiency and stability at the Kirovohrad-based site.

Velta’s CEO Andriy Brodsky confirmed that the company will use the funding to establish its own energy system. This will lower power costs and improve reliability for future operations. The Birzulivske deposit contains 3 million tonnes of ilmenite, making it a strategic source of titanium feedstock. Meanwhile, Velta is preparing to develop its second site, the Likarivske deposit, which contains an additional 2.6 million tonnes and is now in final design stages.

Traxys has a longstanding relationship with Velta. In 2020, the companies signed a five-year, $100 million titanium supply agreement that was fully executed. Traxys supplies titanium raw materials to titanium dioxide producers in North America. Therefore, the fact that Velta secures $2M loan from Traxys signals continued confidence in Ukrainian titanium’s role in global critical mineral supply chains.

The Metalnomist Commentary

This renewed funding reflects investor confidence in Ukraine’s long-term titanium capacity. Velta’s dual-deposit strategy, coupled with energy independence, may help position it as a resilient titanium supplier despite ongoing geopolitical risks.

Ukraine Reboots Silico-Manganese Exports in Q2 2024

Resumption After Halt

Ukraine resumed its silico-manganese exports in the second quarter of 2024, following a significant halt in the first quarter due to the closure of the Ukrainian ferro-alloy supply chain caused by ongoing conflict. This halt at the end of 2023 led to zero exports during the initial months of 2024.

Gradual Increase in Export Volumes

According to Ukrainian export data, the country’s silico-manganese exports surged from zero in Q1 to 22,081 tons in Q2. The rise was gradual, with April exports at 206 tons, May at 4,877 tons, and June seeing a substantial increase to 16,998 tons. Despite this rebound, exports remain significantly lower compared to previous operational levels, with Q2 exports down 83% year-on-year.

Challenges Ahead

Ukraine’s ferro-alloy industry, traditionally a significant European producer, is dominated by five major companies, including two manganese ore producers and three ferro-alloy plants. By the end of 2023, all five had ceased operations, leading to a sharp drop in exports. The Nikopol Ferro-alloy Plant and Zaporizhzhia Ferro-alloy Plant, part of the Privat Group, have capacities of 1.2 million tons per year and 400,000 tons per year, respectively. Although exports are resuming, traders do not expect a significant short-term impact on silico-manganese prices due to the limited quantities involved. The industry will continue to face pressure from high energy costs and a shortage of skilled labor due to the ongoing conflict with Russia.

European Lithium Velta Acquisition Expands Titanium Exposure in Critical Minerals

Velta Holding

The European Lithium Velta acquisition marks a strategic shift beyond lithium into titanium. European Lithium agreed to fully acquire US-based Velta Holding through an all-scrip deal. The transaction will diversify its critical minerals portfolio and support titanium production plans. As a result, the European Lithium Velta acquisition broadens the company’s long-term industrial relevance.

The deal also preserves operational continuity at Velta. Chief executive Andriy Brodskyi and the existing management team will remain in place. Production processes and export contracts will also stay unchanged. Therefore, the European Lithium Velta acquisition appears designed to add capacity without disrupting current business.

The transaction value remains flexible, but the strategic logic is already clear. The implied value stands at about A$48.5mn-A$50.1mn based on recent share prices. European Lithium will transfer 173mn fully paid ordinary shares to Velta shareholders. Consequently, the deal gives European Lithium direct exposure to operating titanium assets and technical know-how.

Ukraine Titanium Assets Add Processing Depth and Strategic Optionality

Ukraine titanium assets are central to the appeal of this transaction. Funding will be directed toward stabilising operations at Velta’s Byrzulivske mining and processing complex. That support is important because asset reliability matters as much as resource ownership. Meanwhile, the company gains access to a working titanium platform rather than an early-stage concept.

Velta also brings a more advanced technology angle. The company has plans tied to a US titanium manufacturing site that would process ilmenite into titanium powder. That project would use Velta’s patented process and Ukrainian feedstock. Therefore, the European Lithium Velta acquisition adds both upstream resource exposure and downstream processing potential.

This matters for the wider critical minerals market. Titanium is increasingly relevant to aerospace, defence, additive manufacturing, and industrial applications. A company that combines lithium exposure with titanium capability can position itself more broadly in strategic materials. As a result, European Lithium may gain a more diversified investment narrative.

Titanium Production Plans Still Depend on Security and Execution

Titanium production plans now depend on more than corporate ambition. Any larger expansion in capacity or investment will remain tied to the security environment in Ukraine. That creates a clear execution risk for the acquired assets. However, it also means the upside could be meaningful if conditions stabilise.

The US angle adds another layer of strategic value. Velta previously received a letter of interest for $60mn from the Export-Import Bank of the United States. That support relates to development of a US titanium manufacturing site. Consequently, the European Lithium Velta acquisition could eventually support a more international titanium supply chain.

For European Lithium, this is a portfolio-shaping move rather than a simple asset purchase. The company is using Velta’s assets and technical capabilities to expand its reach in critical minerals. Meanwhile, it is doing so through a structure that avoids immediate cash strain. Therefore, the deal could prove important if management converts strategic optionality into operating progress.

The Metalnomist Commentary

This acquisition is notable because it links lithium strategy with titanium industrial capability. European Lithium is no longer presenting itself as a single-metal story. If execution holds and security risks ease, the company could emerge with a more credible role in the broader critical minerals chain.

Japan’s Imports of Russian Palladium Rise for First Time Since Ukraine Invasion

Russian Palladium

2024 Sees 22% Year-on-Year Growth Despite Lingering Uncertainty

Japan’s palladium imports from Russia increased in 2024 for the first time since the start of the Russia-Ukraine war in 2022, signaling a potential shift in trade dynamics. According to Japan’s Finance Ministry, total imports reached 12 tonnes, up 22% from the previous year, breaking a six-year streak of decline.

Despite this rebound, it remains uncertain whether Russian deliveries will return to pre-invasion levels of 17–20 tonnes per year. The modest growth comes amid ongoing geopolitical tensions and evolving global trade strategies.

Import Diversification Efforts Appear Short-Lived

Following the 2022 invasion of Ukraine, Japan dramatically cut Russian palladium imports, which fell to 14.5t in 2022 (−19%) and then further to 9.9t in 2023 (−32%). Although palladium was not subject to direct sanctions, Japanese firms voluntarily reduced purchases over stakeholder concerns.

In response, Japan diversified supply in 2022, doubling imports from the U.S. (6.4t) and Italy (1t), while Taiwan and South Korea also saw sharp increases. However, these gains proved short-lived: in 2023, U.S. imports fell by over 50% to 2.8t, Taiwan’s dropped to 56kg, and South Korea’s dropped to 256kg, down 75% from 2022.

Since June 2024, Russian palladium shipments to Japan have exceeded 1 tonne monthly for seven consecutive months, suggesting tentative signs of recovery—but not yet a strong trend.

South Africa Remains Japan’s Dominant Supplier

While Russian supply fluctuates, Japan continues to lean heavily on South Africa, which delivered 23 tonnes in 2024—up 1.7% year-on-year. South Africa now accounts for 58% of Japan’s total palladium imports, marking the third consecutive year above 50%.

Analysts caution that despite recent increases, Japanese imports of Russian palladium are still well below historical averages. Whether a long-term recovery is underway will depend on market signals, policy sentiment, and the global palladium trade environment in 2025 and beyond.

China Raises Overseas Titanium Sponge Supply Amid Oversupply Pressure

China Titanium Sponge

Chinese Titanium Sponge Exports Surge in Response to Oversupply

Chinese titanium sponge producers are rapidly increasing exports to manage growing domestic oversupply. China has dominated global titanium sponge production since 2020, driven by aggressive capacity expansion and high revenues. In 2023, China’s top nine producers delivered 247,400t, a 13.5pc rise year-on-year, marking the ninth straight annual increase.

Export Volumes Climb as Global Buyers Shift from Ukraine and Japan

China exported 1,079t of titanium sponge in January–February 2025, up 29pc year-on-year, customs data shows. Demand rose sharply after Ukraine’s Zaporozhe plant shut down and Japanese suppliers diverted output to Europe and the U.S. South Korea, Japan, and the U.S. became China’s top three buyers in 2024, collectively absorbing over 3,800t.

Tariffs and Caution Temper U.S. and Japanese Import Growth

U.S. imports dropped 35pc in early 2025 due to new Trump-era tariffs, despite 2024 volumes surging nearly 8-fold. Japan doubled its imports to 1,162t last year, likely for quality testing and low-cost applications, not aerospace-grade use. Meanwhile, Japanese producers remain dominant domestically with a 65,000 t/yr capacity and cautious optimism about competition.

The Metalnomist Commentary

China’s titanium sponge industry now walks a fine line between growing export momentum and long-term structural oversupply. While quality improvements have opened doors to Japan and the U.S., geopolitical barriers like tariffs and technical certification hurdles will continue to shape the pace of China's global expansion. Still, the supply shift signals a major realignment in the global titanium value chain.

EU Russian Energy Imports Ban Holds Firm Despite New Energy Crisis

EU Russian Energy

EU Russian energy imports will not return under the European Commission’s current policy direction, even as the bloc faces renewed energy pressure from the Middle East conflict. EU energy commissioner Dan Jorgensen said Brussels will continue phasing out Russian gas and still plans to cut Russian oil imports.

EU Russian energy imports have become a strategic red line for Brussels. The Commission argues that returning to Russian supply would recreate the dependency that exposed Europe after Russia’s full-scale invasion of Ukraine in 2022.

EU Russian energy imports are again being debated because higher oil and gas costs are hitting parts of the European economy. However, Brussels is treating the current disruption as a reason to accelerate energy diversification, not reopen Russian supply channels.

The position links energy security directly to industrial resilience. Europe now wants less exposure to both Russian energy and Middle East supply disruption, while shifting more demand toward domestic, renewable and alternative energy systems.

Russian Oil Phase-Out Remains Politically Sensitive

The Commission has not yet presented new legal measures to phase out Russian oil imports. It delayed a proposal originally scheduled for 15 April and has not set a new publication date.

Still, Brussels says a permanent Russian oil ban remains a priority. That matters because Hungary and Slovakia remain the only EU importers of Russian crude, keeping pipeline supply through Druzhba at the centre of political negotiations.

Hungary had opposed blocking Russian oil imports under Viktor Orban. His successor, Peter Magyar, has acknowledged that Hungary cannot end Druzhba imports immediately, but has pledged to eliminate dependence on Russian energy by 2035.

Slovakia has also linked Russian oil flows to its support for further sanctions against Moscow. Bratislava has indicated it could support another sanctions package once Russian oil reaches Slovakia through the Druzhba pipeline.

This shows the difficulty of EU energy policy. The bloc wants a unified strategic position, but member states still have different infrastructure, refinery configurations and supply dependencies.

The Druzhba pipeline therefore remains more than a crude route. It is a political lever in sanctions, energy security and Ukraine-related financing discussions.

Energy Crisis Reinforces Clean Supply Strategy

The current Middle East energy crisis has intensified the EU’s focus on supply security. Jorgensen said the disruption is comparable in seriousness to the 1973 oil crisis and the 2022 Russian energy shock.

The Commission expects LNG prices to take years to stabilise. It also expects oil capacity to need months to normalise after the war ends, showing that energy disruption can outlast military events.

This strengthens the EU case for domestic and clean energy. The Commission wants to reduce import dependence through renewables, electrification, storage, hydrogen and alternative fuels.

For industry, the implication is clear. Europe’s energy security strategy will increasingly affect metals, grids, chemicals, transport fuels and clean technology supply chains.

Lower Russian energy dependence also raises demand for infrastructure. Europe will need more copper, aluminium, electrical steel, transformers, batteries, renewable equipment and grid materials to replace fossil fuel exposure with domestic power systems.

The policy challenge is execution. Europe must cut Russian dependence while managing fuel prices, refinery supply, LNG volatility, industrial competitiveness and political pressure from member states.

The Metalnomist Commentary

Europe’s refusal to return to Russian energy shows that energy security has become an industrial sovereignty issue. The next test is whether the EU can replace fossil dependency with real domestic energy infrastructure fast enough to protect industry from repeated external shocks.

EU Selects 13 Strategic Raw Material Projects Outside the Bloc

EU strategic raw material projects

EU Seeks to Diversify Critical Mineral Supply Chains

The European Commission has approved 13 strategic raw material projects outside the European Union, estimating a total capital investment of €5.5bn ($6.26bn) to bring them online. Chosen from 49 applications, these projects span Brazil, Canada, Greenland, Kazakhstan, Madagascar, Malawi, New Caledonia, Norway, Serbia, South Africa, the UK, Ukraine, and Zambia. Under the 2024 EU Raw Materials Act, the bloc aims by 2030 to domestically extract 10pc, process 40pc, and recycle 25pc of 17 strategic raw materials. Additionally, no single third country should supply more than 65pc of annual EU consumption.

Targeting Lithium, Nickel, Cobalt, Manganese, and Rare Earths

Ten of the approved projects focus on lithium, nickel, cobalt, manganese, and graphite, while two — Songwe Hill in Malawi and Zandkopsdrift in South Africa — will extract rare earth elements. Other notable initiatives include Rio Tinto’s Jadar lithium and boron project in Serbia, the Integrated Dumont Nickel Project in Canada, Kobaloni Energy’s cobalt processing in Zambia, and Balakhivka Graphite Deposit in Ukraine. The EU will provide coordinated support, including facilitating finance and connecting projects with potential off-takers. Industrial commissioner Stephane Sejourne emphasised that diversifying away from dependency on countries like China is critical, given current reliance levels exceeding 100pc in some refining and recycling segments.

The Metalnomist Commentary

The EU’s latest selections mark a significant expansion of its global strategic raw material network, signalling an urgent push to secure supplies ahead of the 2030 targets. While the €5.5bn investment is substantial, long-term success will depend on execution speed, environmental considerations, and stable geopolitical relations with host nations.

EU Awards €7.3mn Grant to Titanium Consortium for Sustainable Extraction and Processing

EU Titanium

The EU has awarded a €7.3mn ($8.1mn) grant to 13 companies under its REPTiS project for the responsible extraction and processing of titanium and other primary raw materials for EU industrial value chains and strategic sectors. The grant will be used to demonstrate the viability of titanium extraction, processing, and deployment within the EU in collaboration with Ukraine.

Funded under the EU's Horizon Europe programme, the project will run for four years, ending on August 31, 2028. The project is coordinated by the European Powder Metallurgy Association (EPMA), with major participants including Ukrainian titanium producer Velta and aerospace manufacturer GKN Aerospace. Most of the funding is earmarked for Velta and the EPMA, while other recipients include companies specializing in metal injection molding, additive manufacturing, research centers, and universities. The full €7.3mn budget allocation is yet to be detailed.

The goal is to showcase solutions for titanium extraction and processing across the value chain, including mining ilmenite ore at Velta's Byrzulivske deposit and producing low-carbon titanium powder. Technologies like additive manufacturing and metal injection molding will be employed to manufacture aerospace components and medical products.

A life-cycle assessment will compare these methods to conventional practices. Velta's CEO, Andriy Brodsky, emphasized that the EU’s recognition of Ukraine as a strategic partner ensures a secure titanium supply chain, crucial for global industries. The Ukrainian government has been encouraging international investment in the country's titanium industry, with a key auction for titanium firm UMCC set for October 9.

EU Russia Sanctions Package Tightens Shadow Fleet and Metals Trade Controls

EU, Russia

EU Russia sanctions package measures have formally expanded as Brussels adds new pressure on Russia’s oil logistics, maritime services and raw materials trade. The 20th sanctions package adds 46 vessels to the EU’s shadow fleet list and creates the legal basis for a future ban on maritime services linked to Russian crude and oil product shipments.

The EU Russia sanctions package brings the total number of designated shadow fleet tankers to 632. These vessels face port access bans and restrictions on a broad range of maritime transport services.

The EU Russia sanctions package aims to close loopholes around the G7 oil price cap. Brussels is targeting vessels, ports, terminals, tanker sales and service providers that may help Russia move crude and oil products outside the sanctioned framework.

The package also expands trade restrictions to several raw materials and metals, including aluminium products, silicon, lithium oxide, cobalt, molybdenum, magnesium, platinum, rhodium and iridium. This widens the impact from energy sanctions into industrial supply chains.

Shadow Fleet Measures Push Sanctions Deeper Into Maritime Logistics

The main focus of the package is Russia’s shadow fleet. These tankers have become central to Moscow’s efforts to move crude and products while avoiding price-cap restrictions and western maritime services controls.

The EU has now banned transactions with the Russian ports of Murmansk and Tuapse, as well as the oil terminal at Karimun in Indonesia. Brussels said these locations are being used to bypass the price cap.

Earlier sanctions already covered Ust-Luga, Primorsk and Novorossiysk. The wider port and terminal coverage shows that the EU is moving from targeting ships alone to targeting the infrastructure that supports Russian oil flows.

Georgia’s Kulevi port was not included after EU officials said they received strong commitments. This shows that Brussels is also using sanctions pressure to influence third-country port behaviour.

The package introduces mandatory due diligence and a “no-Russia” clause for tanker sales. This is intended to prevent vessels from moving into Russian-linked fleets through resale channels.

The EU has also prohibited maintenance and other services for Russian LNG tankers and icebreakers. From January 2027, LNG terminal services to Russian entities, or entities controlled by Russian nationals or operators, will also become illegal.

The future maritime services ban is especially important. Under current rules, shipping, insurance and other services are still allowed for Russian oil shipments sold at or below the G7 price cap.

The new framework prepares the legal basis for a stricter system. The EU plans to co-ordinate any future ban with G7 partners and other price-cap countries.

This would mark a significant escalation. A broader maritime services ban could reduce Russia’s ability to use western-linked insurance, shipping support, technical services and terminal access even when cargoes claim price-cap compliance.

Metals Restrictions Extend Pressure Into Industrial Supply Chains

The sanctions package also expands pressure beyond oil and gas. It adds 120 individuals and entities to the EU sanctions list, including 36 designations linked to the upstream and downstream oil sector.

Some listings involve entities based in third countries. This reflects the EU’s increasing focus on sanctions circumvention through non-EU jurisdictions.

The trade measures are also important for metals and industrial materials. The EU introduced a yearly ammonia import quota of 688,000t and widened import restrictions to additional raw materials and metals.

The restricted materials include steel, aluminium products, silicon, salt, calcium oxide, rubber, lithium oxide, cobalt, molybdenum, magnesium, platinum, rhodium and iridium.

This matters because Russia remains connected to several industrial raw material flows. Even when volumes are not dominant, sanctions can affect procurement, compliance, documentation and alternative sourcing decisions.

Platinum, rhodium and iridium are particularly sensitive because they support automotive catalysts, hydrogen technologies, electronics, chemicals and high-performance industrial applications. Any restrictions on Russian-linked flows could increase attention on South African, recycled and alternative supply.

Cobalt, molybdenum and magnesium restrictions also carry strategic relevance. These materials feed batteries, superalloys, specialty steels, aerospace, automotive and defence-related supply chains.

Aluminium product restrictions may add another layer of complexity to European aluminium procurement, especially as the market already faces higher premiums, energy cost pressure and disrupted trade flows.

The package was adopted after Russian pipeline crude flows resumed to Hungary and Slovakia through the Druzhba system. That restart removed a political obstacle that had delayed approval.

The EU also formally adopted a €90bn loan package for Ukraine. Disbursements could begin next month to support urgent budgetary and defence needs in 2026 and 2027.

The combined measures show that Brussels is linking sanctions enforcement, energy security, Ukraine financing and industrial trade policy more tightly. Russia sanctions are no longer limited to direct oil and gas restrictions. They now reach vessels, ports, financing, raw materials, metals and third-country trade channels.

The Metalnomist Commentary

The 20th EU Russia sanctions package shows that enforcement is moving from headline bans toward logistics, ports and material flows. For metals buyers, the key risk is not only direct Russian origin, but the growing compliance burden around third-country routing, documentation and restricted raw materials.

China’s Titanium Sponge Exports Double as Global Supply Tightens

China Titanium Sponge

China's titanium sponge exports surged 104% in 1H 2025 to 3,586t. China's titanium sponge exports filled supply gaps from Russia and Ukraine disruptions. China's titanium sponge exports now anchor aerospace-grade feedstock for global mills.

Drivers and supply displacement

War halted Zaporozhe operations and cut output at VSMPO-Avisma and Solikamsk. Consequently, international buyers pivoted to Chinese sponge to secure critical inputs. Demand came from aerospace, medical devices, and mill products manufacturers. Tighter supply outside China supported new contracts and spot lifting.

June slowdown and shifting destinations

However, June exports fell to 446t, down 33% year on year. Shipments also fell 32% from May amid absent US buying. Taiwan received 120t; South Korea 100t; the Netherlands 60t. India took 40t, and Japan purchased 25t during the month.

Meanwhile, US demand remained weak under higher tariffs and softer mill activity. First-half US receipts dropped 80% to 123t. As a result, Chinese supply rebalanced toward Asian and European customers.

The Metalnomist Commentary

We expect contract buyers to hedge with multi-source sponge as tariffs evolve. Watch aerospace backlogs, Russian repairs, and US policy for price direction. Sustained US absence could deepen Asia-centric trade flows into 2026.

India's Manganese Alloy Imports Surge, Prompting EU Trade Protection Measures

Manganese Alloy

Rising Indian Imports Disrupt European Manganese Market

India's manganese alloy exports to Europe have surged, reshaping market dynamics and triggering a safeguard investigation by the European Commission. In January-November 2020, India accounted for only 3% of EU ferro-manganese imports, but by 2024, this share skyrocketed to 28%, totaling 104,376 metric tons.

The silico-manganese market also saw a dramatic shift. India’s share of EU silico-manganese imports grew from 10% in 2020 to 29% in 2024, reaching 164,722 metric tons. Other countries, including Georgia and Zambia, also expanded their presence, filling gaps left by Ukraine’s production collapse due to conflict with Russia.

European Producers Struggle to Compete

European manganese alloy producers have faced declining exports amid India's rising market share. France, Slovakia, and Spain saw major drops in silico-manganese exports between 2020 and 2024. France’s exports fell 64%, while Slovakia and Spain recorded declines of 35% and 11%, respectively.

Similarly, EU ferro-manganese exports have weakened. France's shipments fell 28%, while Slovakia’s exports dropped 47%. These declines stem not only from rising Indian competition but also from weaker demand in the EU stainless steel industry.

EU Commission Launches Safeguard Investigation

To protect European manganese and silicon-alloy producers, the European Commission initiated a safeguard investigation on December 19, 2024. Possible outcomes include higher customs duties or import quotas.

European buyers have increased their purchases of Indian manganese alloys in anticipation of potential restrictions, driving Indian manganese alloy prices higher in January. Meanwhile, Norwegian producers, who supply 40% of ferro-manganese and 35% of silico-manganese to Europe, are expected to receive exemptions from trade measures.

Glencore Trade Flow Disruption Expected Amid Global Tariff Tensions

Glencore

Commodity Supply Chains Face Potential Reorientation in Coming Months

Glencore warns of trade flow disruption due to rising global tariffs, though no major impacts have materialized yet. The trading giant highlighted ongoing risks in supply chains spanning the U.S., China, Canada, and Europe—all of which have implemented or announced new tariffs this month. Despite current stability, Glencore anticipates physical trade flow dislocations will likely emerge in the near term.

Risk Management Becomes Central in Volatile Market Conditions

Glencore emphasized its priority on risk management given its exposure to complex commodity supply chains. The company acknowledged that while primary trade routes remain intact, evolving tariff structures may force reorientation in commodity logistics. The firm is prepared to adapt, noting that similar dislocations during the Covid-19 pandemic and Ukraine conflict led to record earnings for its marketing division.

Market Volatility Could Create Strategic Trading Opportunities

Glencore believes upcoming disruptions may present trading opportunities across commodity sectors. Historically, the company capitalized on elevated price volatility in 2020 and 2022–23, especially in the oil markets. While Glencore did not disclose its Q1 results, it expects its 2025 marketing earnings to fall within the $2.2bn–$3.2bn guidance range, reinforcing confidence in its ability to navigate uncertainty.

The Metalnomist Commentary

The Glencore trade flow disruption alert reflects a broader industry shift toward agile supply chain strategies. As geopolitical instability grows, the ability to profit from volatility may define competitive edge in the trading sector.

Domestic Imports of Noble Alloys Fell in 2Q

Shipments of noble alloys to the United States declined in the second quarter, reflecting weaker demand from domestic steel producers and a narrower U.S. premium compared to the previous year.

- According to U.S. Commerce Department data released this week, total imports of noble alloys, including ferro-molybdenum, ferro-niobium, ferro-titanium, ferro-vanadium, and ferro-tungsten, fell by 14% to 6,352 metric tons.

- Shipments of ferro-molybdenum from Chile, the primary global supplier, dropped by 19% to 1,887 tons, while imports of South Korea-sourced alloys plunged by 34% to 683 tons.

- Ferro-niobium imports from Canada decreased by 11% to 1,009 tons but were largely offset by a 13% increase in shipments from Brazil, totaling 1,194 tons.

- Consolidated ferro-titanium imports from Eastern Europe—comprising Estonia, Latvia, and Ukraine—plummeted by 71% to 123 tons, while U.K. shipments fell by 36% to 267 tons.

- U.S. imports of ferro-vanadium from Austria sank by 61% to 133 tons, though Canadian imports rose by 40% to 402 tons.

- South Korea shipped only 1 ton of ferro-tungsten to the U.S. from April to June, with no imports from regular suppliers Vietnam and Mexico.

Osaka Titanium’s Sales Dip as Demand Stabilizes After Last Year’s Surge

Osaka Titanium Technologies reported a significant decline in sales during the April-June period as demand for titanium sponge normalized following an exceptional surge in the previous year. The Japanese producer's titanium business segment saw sales drop by 16.8% year-over-year, totaling ¥11.2 billion ($76.2 million).

The company attributed the decline primarily to a reduction in orders from clients who had previously rushed to secure titanium sponge supplies. This rush was driven by the aviation industry's move to avoid Russian products in response to the Ukraine war, leading to an "exponential" increase in procurement during the same period in 2023. However, this demand has now plateaued, with orders reflecting "real demand" during the April-June timeframe, according to an Osaka Titanium spokesperson.

Titanium sponge exports, which represent 72% of the company’s total titanium sales, also experienced a downturn, decreasing by 7.2% to ¥8 billion.

Despite the lower sales, Osaka Titanium’s profit soared by 69.7% year-over-year to ¥2.9 billion. This profit boost was largely due to price increases of 10% for export and 20% for domestic deliveries, coupled with a weaker Japanese yen, which enhanced the company's price competitiveness in international markets.

Osaka Titanium had anticipated this decline, having forecasted lower demand for the April-September period with an expected recovery in the second half of the fiscal year ending March 31, 2025.

Rusal Shifts Focus to Asia as Regional Sales Surge in 2024

Rusal

In the first half of 2024, Russian aluminum giant Rusal continued to shift its business focus from Europe to Asia, with the region now accounting for over 40% of its total revenue. This strategic realignment comes in response to ongoing geopolitical challenges and restrictions on Russian metal in Europe and the U.S. following the Ukraine conflict.

Strong Sales Growth in Asia, Decline in Europe

Rusal's revenue for January to June 2024 dropped by 4.2% year-on-year to $5.695 billion, mainly due to lower aluminum prices and premiums. However, sales to Asia, particularly China, increased significantly, rising by 19.9% compared to the first half of 2023, reaching $2.37 billion. In contrast, sales to Europe plummeted by 32.7% to $1.26 billion during the same period. As a result, Asia accounted for 41.6% of Rusal’s revenue in the first half of 2024, up from 33% the previous year.

Rusal also bolstered its raw material supply chain by acquiring a 30% stake in Chinese alumina producer Hebei Wenfeng New Materials in October 2023, contributing to a nearly 19% increase in alumina output. Aluminum production rose slightly by 2.3%, while net profits surged by 41.6%, driven by a 22% reduction in non-alumina raw material costs.