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.

China's Rising Titanium Sponge Export and the Future of Aerospace Supply Chains

China's Titanium Sponge

A Surplus That Could Fill a Global Gap

With certified titanium sponge supplies projected to hit a deficit in the next four years, China’s output capabilities become increasingly relevant. While traditional producers like Japan, Saudi Arabia, and Kazakhstan near full capacity, major aerospace companies such as Airbus and Safran are considering alternatives to mitigate supply risks. China produced 218,000 tons of titanium sponge in 2023, marking the ninth consecutive year of production growth, largely due to domestic oversupply, according to the China Nonferrous Metals Industry Association.

However, introducing Chinese sponge to critical applications is no simple task. Certification timelines for standard quality (SQ) and premium quality (PQ) sponge can extend from three to over five years. The long lead time is essential for parts such as disks and blades in commercial aero engines, where safety standards demand rigorous checks for oxygen and nitrogen contamination. “China’s significant production capabilities are promising, but certification processes and qualification timelines are a major barrier,” said Marty Pike, vice president of global commercial strategy at U.S. metals producer ATI, at a recent titanium industry event in Texas.

Geopolitical Concerns and Legislative Guardrails

While Airbus has signaled openness to exploring Chinese titanium sponge, the decision ultimately lies with engine manufacturers. Other industry leaders, however, cite concerns over potential sanctions that may result from China’s involvement, given rising Asia-Pacific tensions. Any U.S. or EU industries reliant on Chinese titanium sponge could face supply chain vulnerabilities if diplomatic relations falter.

U.S. imports of Chinese titanium sponge are rising despite tariffs, driven by cost pressures. The average price for Chinese imports to the U.S. is notably lower than that from Japan, even after duties, offering an attractive price point. A recent bill, the Securing America’s Titanium Act, seeks to balance this by waiving the standard 15% tariff on titanium sponge but maintaining a 25% tariff on Chinese imports. The proposed legislation also aims to monitor foreign influence over the U.S. supply chain, underscoring the careful stance lawmakers are taking toward titanium imports.

EU and Future Outlook

Europe's titanium sponge import dynamics are less transparent due to limited reporting and autonomous tariff suspensions. Unlike the U.S., EU markets face no duty on imports, making it an attractive market for Chinese exporters. While the aerospace sector remains cautious, other industries such as medical and industrial may more readily accept Chinese sponge as they seek cost-effective solutions.

As the titanium market evolves, balancing supply demands, certification processes, and geopolitical risks will shape the future of titanium sponge in aerospace, with China poised as a powerful, if complex, player in the unfolding narrative.

China's Titanium Sponge Production to See Significant Expansion Amid Demand Growth

China's Titanium Sponge

China's titanium sponge production capacity is set to experience a major boost, potentially reaching between 300,000 and 500,000 tonnes per year over the next three to five years, according to An Zhongsheng, secretary-general of the China Nonferrous Metals Industry Association's titanium zirconium and hafnium branch (CNIA-Ti). This expansion is expected to be driven by increased demand across various sectors including aerospace, marine engineering, chemical production, computer, communication and consumer electronics (3C), daily necessities, and air conditioning, as reported at the China and CIS Titanium Industry Development Forum held in Xi'an, Shaanxi province.

Global civil aviation demand, recovering from the impacts of the Covid-19 pandemic, has put strain on aviation-grade titanium sponge supplies. An emphasized that while the aerospace industry is recovering, industrial sectors are propelling China's titanium market with consistent growth in recent years.

Currently, China's titanium sponge production capacity hovers around 300,000 tonnes per year. In the broader market, titanium's growing use in civilian products is anticipated to be a significant growth catalyst for the Chinese titanium industry.

Although global demand for titanium in the medical industry has surged, Chinese demand in this sector has been hampered by healthcare reforms promoting the use of cost-effective materials. Despite this, prices for titanium sponge are projected to remain relatively stable, enhancing its appeal across a range of applications. An Zhongsheng reassured industry stakeholders that China’s domestic supply of titanium sponge will meet future demands due to planned capacity expansions.

The anticipated rapid growth in titanium sponge production marks a transition for titanium from a rare metal to a more commonly used material, according to An. In the first half of this year, China produced 123,500 tonnes of titanium sponge, according to CNIA-Ti data.

Nevertheless, China continues to rely on imports for approximately 35-40% of its titanium ores and concentrates, reflecting its position in the global supply chain. Last year, global production of titanium ore and concentrate amounted to 8.75 million tonnes (t) of titanium dioxide equivalent, with China contributing 37%, followed by Mozambique (18%), South Africa (11%), and Canada (6%).

In the realm of titanium dioxide production, China led with 55% of global output in 2023, maintaining growth through domestic capacity expansions. Additionally, the world's titanium sponge production rose by 29% to 347,000 tonnes in 2023, with China’s output surging from a 25% share in 2022 to a dominant 63%. Russia, Japan, and Saudi Arabia also witnessed increases in their titanium sponge output, while Ukraine reported zero production.

For titanium mill products, global production in 2023 reached 248,000 tonnes, with China accounting for a commanding 64%, trailed by the United States (14%), Russia (13%), Japan (6%), and Europe (3%).

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.

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.

Chinese Titanium Sponge Prices Plummet Amid Surging Production and Weak Demand

China titanium sponge exports 2020-24 (t)

Chinese titanium sponge prices have dropped to their lowest levels in eight years as the market faces a combination of increased production and waning demand. As of August 1, prices for 99.7% grade titanium sponge were assessed at 49,000-50,000 yuan per ton ($6.89-7.03 per kilogram), marking the lowest point since November 2016 and a decline of 4.8% from late May.

The fall in prices is largely attributed to a surge in output from China's 12 major titanium sponge producers, whose combined production reached 141,600 tons between January and July, a 15% increase from the same period last year. This increase follows the expansion of production capacities, with overall sponge output capacity rising by 23% in 2023 to 320,000 tons per year.

Notably, state-controlled Pangang Titanium Industry and LB Group, the world's largest titanium dioxide producer, have been key players in this expansion. Pangang increased capacity at its Sichuan province facility by adding a 35,000 tons per year production line in September 2023, while LB Group’s subsidiary, Yunnan National Titanium Metal (Guotai), reached its design capacity of 80,000 tons per year at its Xinli plant, making it China's largest sponge producer.

Despite these production increases, the market remains oversupplied, with downstream sectors such as the chemical, military, and civil industries showing sluggish demand. A major titanium mill in Baoji reportedly purchased sponge at 48,000 yuan per ton in late July, anticipating further price drops due to continued weak demand and excessive supply.

Producers have attempted to cut prices to stimulate sales but have struggled to secure large orders. Many buyers are holding off on restocking, expecting prices to decline further in the near term. Analysts suggest that if spot prices fall to 46,000-47,000 yuan per ton, major producers may be forced to cut output.

Exports have provided little relief to the domestic market. China's titanium sponge exports reached 2,426 tons during the first half of 2024, accounting for just 2% of domestic production. While exports nearly doubled year-on-year in June, the overall volume remains insufficient to balance the oversupplied domestic market.

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.

China's Titanium Sponge Exports Rise While Imports Decline in 2024

Titanium Sponge

Increased Demand from Key Markets Drives Export Growth

China's titanium sponge exports rose in 2024 due to increased demand from South Korea, the US, and Japan. According to customs data, exports reached 5,993 tonnes, marking a 2.7% increase from 2023 levels. In December alone, exports surged to 752 tonnes, more than doubling from 359 tonnes a year earlier. South Korea, Japan, and Taiwan emerged as the primary buyers, importing 191 tonnes, 290 tonnes, and 80 tonnes, respectively.

South Korea’s imports of Chinese titanium sponge tripled in 2024, reaching 1,565 tonnes compared to 515 tonnes in 2023. Japan’s purchases more than doubled to 1,162 tonnes, while the US saw an almost eight-fold increase, acquiring 1,098 tonnes.

Declining Imports Due to Domestic Supply and Price Differentials

China’s titanium sponge imports fell by 24% in 2024, dropping to 101.9 tonnes from 133.8 tonnes in 2023. The decrease was attributed to sufficient domestic supply and high international prices. In December, China imported only 0.3 tonnes, contrasting with zero imports recorded in November 2024 and December 2023.

The average price for 99.7% grade titanium sponge in China stood at 49,666 yuan ($6,841) per tonne in 2024, or $6.86 per kilogram. In comparison, European titanium sponge prices averaged $11.50 per kilogram, making imports less economically viable for Chinese buyers.

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.

China's Titanium Sponge Export Surge Amid Global Supply Crunch

China’s titanium sponge exports experienced a significant increase from January to July 2024, with a rise of 6% to 3,052 tons compared to the previous year. This uptick reflects heightened international demand driven by the ongoing Russia-Ukraine conflict, which has disrupted global titanium sponge supply.

Export Trends and Market Impact

During July alone, China exported 626 tons of titanium sponge, a notable 59% increase from the previous year, although slightly lower than June’s figures. Major importers included the US, Japan, and Taiwan, reflecting sustained global interest. Conversely, China's imports of titanium sponge plummeted by 99% to just 0.20 tons due to high international prices and adequate domestic supply. Domestic prices for titanium sponges have remained stable, with minimal fluctuations despite global market volatility.

Overcoming High Tariffs through Titanium Recycling Materials

DongA Special Metal (DASM) Homepage

Reducing Costs by Using Titanium Scrap in the Age of High Tariffs

Since Donald Trump's election, the world has entered an era of high tariffs. In response to recent U.S. tariff policies, global companies have faced significant challenges in sourcing raw materials. This is especially true in the steel industry, which is struggling due to the influx of low-priced Chinese products. Companies in this sector are working tirelessly to secure materials and reduce costs in various ways.

The tariffs on Chinese materials have further diminished the competitiveness of U.S. companies in the domestic market. In addition, a predicted global industrial slowdown adds to the challenges. To remain competitive, companies must prioritize cost reduction. However, finding viable alternatives in this high-tariff era remains a struggle.

The situation is different in the specialty steel sector. Unlike common materials such as iron, stainless steel, and copper, which are largely controlled by China, the use of scrap offers limited cost savings in these areas. However, specialty alloys like nickel and titanium provide a significant opportunity for cost reduction. By using scrap materials in the production of these alloys, companies can achieve a 15-20% reduction in costs, making it a highly effective strategy for cutting expenses.

Scrap → Feedstock

Global Companies and the Shift Toward Scrap Use

Despite these benefits, the use of scrap in the specialty alloys sector remains relatively low, with only a few companies with advanced technology utilizing it. The main reason for this is a lack of understanding of its practical benefits. Integrating scrap into the production process can lead to substantial improvements in efficiency and simplification of operations, which naturally reduces costs. However, many companies fail to recognize these advantages, often due to a lack of experience.

To truly cut costs, increasing scrap usage is crucial. Additionally, the tariff situation has so far spared scrap materials from high taxes, making their use even more attractive. The growing need for scrap is becoming increasingly apparent as industries look for ways to cut costs and avoid tariff impacts. This raises the question: where can companies source specialty metal scrap?

South Korea Sees the Rise of a Scrap Specialization Recycling Company

To address these challenges, a specialty metal recycling company based in South Korea(DongA Special Metal) has developed technology to enhance scrap usage. This company has been recycling specialty alloys such as nickel, titanium, and zirconium for years, producing titanium sponge substitutes and feedstock for export to global markets. They offer a comprehensive service that includes advising on scrap alloy usage and ensuring that the final product meets industry standards.

Ti Sponge VS Ti Cobble

The company has particularly focused on titanium, a material known for its strength and elasticity. They break down titanium and process it into titanium sponge substitutes. This method not only makes titanium more affordable but also reduces the carbon emissions associated with titanium sponge production, which has become a significant concern in the metals industry. This innovation addresses both cost reduction and environmental challenges, making it an ideal solution for companies aiming to enter the U.S. market in the high-tariff era.

In recent years, the U.S. has increasingly turned to scrap use in the metals industry. In 2021, all U.S. titanium sponge plants were shut down due to environmental concerns, and the country now relies entirely on imports. As the use of scrap and alloys continues to grow, it’s clear that companies looking to stay competitive must address material sourcing challenges to succeed in the future.

DongA Special Metal Scrap Recycling Process

Osaka Titanium Confirms Sponge Plant Expansion

Osaka Titanium

Japan's Osaka Titanium Technologies has announced a significant investment of ¥33 billion ($225 million) in its Amagasaki plant, aiming to boost its titanium sponge production capacity by 25%. The expansion will increase the plant's annual capacity from 40,000 to 50,000 tons, with construction slated for completion by the end of March 2028. The planned investment has risen by 10% from the initial estimate, a change attributed to the higher costs of construction materials.

The decision to expand comes in response to heightened demand from the aerospace industry. As existing fleets near the end of their service lives and more wide-body aircraft are being constructed, the need for titanium sponge is expected to grow. This move also addresses the current tight supply of titanium sponge, as manufacturers seek alternative suppliers to reduce dependence on Russia’s VSMPO-Avisma.

An Osaka Titanium representative noted that the price of high-grade titanium sponges is unlikely to decrease in the near future. The expansion is partially funded by a government subsidy of up to ¥8.04 billion, reflecting Japan's strategic designation of key raw materials used in aviation. Despite the impact of Typhoon Shanshan, which struck Japan on August 29, Osaka Titanium reported that its production and shipments have not been disrupted.

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.

China Titanium Consumption 2025 Rises as Export Challenges Persist

China Titanium, Xinnuo Titanium

China titanium consumption 2025 is expected to rise slightly, driven by demand from aerospace, electronics, and power industries. However, Chinese titanium producers continue to face significant export barriers in Western markets, especially the U.S. and EU, due to tariffs and certification hurdles.

Aerospace and 3C Sectors Lead Titanium Demand Growth

China consumed 151,000 tonnes of titanium mill products in 2024, up 1.6% year-on-year, according to CNIA-Ti. The aerospace sector recorded the largest growth, consuming 32,193 tonnes—an increase of 2,816 tonnes from 2023. The power industry followed, supported by growth in renewable energy, while 3C (computer, communication, and consumer electronics) demand rose by 10% to 11,000 tonnes, with Apple, Samsung, and Huawei sourcing parts from local suppliers.

Chemical applications remained the largest titanium-consuming sector at 48.5% of total demand, but usage in chemicals, ocean engineering, and salt manufacturing declined. Shipbuilding also saw steady growth, increasing consumption by 1,191 tonnes to 4,933 tonnes.

Titanium Sponge Output Rises, Led by China and Saudi Arabia

Global titanium sponge production increased by 12% in 2024 to 380,300 tonnes. China led with 256,000 tonnes, up 36%, accounting for 67% of global output. Saudi Arabia followed with a 17% rise to 15,000 tonnes. Japan’s sponge output declined 3.5% to 55,000 tonnes, while Ukrainian production remained at zero.

Russia's VSMPO-Avisma and Solikamsk produced between 20,000 and 26,500 tonnes, while Western buyers continue sourcing from Russia due to limited alternatives, despite sanctions and restrictions.

Export Market Access Remains a Major Hurdle

Chinese titanium exporters are eager to enter Western aerospace markets, but qualification requirements for sponge and semi-finished products like billets and bars remain a key challenge. In the U.S., a 20% tariff on titanium products imposed in early 2024 has stalled contract negotiations. Although titanium is exempt from reciprocal tariff increases, the uncertainty has added risk for long-term buyers.

In contrast, the EU and UK have suspended some titanium tariffs for aerospace, but supply chains remain locked into existing agreements with qualified Western producers. Market penetration remains difficult despite strong output growth in China.

The Metalnomist Commentary

The China titanium consumption 2025 forecast reflects steady domestic growth, led by aerospace and electronics. However, real global competitiveness hinges on overcoming certification and tariff-related export hurdles, particularly in Western aerospace markets still reliant on legacy Russian supply chains.

China's Magnesium Sector Faces Oversupply and Price Challenges Despite Rising Output

China's Magnesium

China’s magnesium industry, which accounts for a staggering 83% of the world’s magnesium production, is grappling with challenges of oversupply and volatile prices, according to insights shared at the 27th annual conference of the China Magnesium Association (CMA) held in Xi'an.

Decade-Long Capacity and Utilization Issues

Over the past decade, China’s magnesium production capacity has ranged between 1.3 million and 1.5 million tonnes per year (t/yr). However, actual output has lagged behind at 800,000 to 1 million t/yr, resulting in an average utilization rate of just 63%, according to data from the China Nonferrous Metals Industry Association (CNMA).

Dependence on Traditional Sectors

The sector’s primary consumption is still tied to traditional industries like aluminium alloys, steel, and titanium sponge. Attempts to diversify into new applications, such as magnesium alloy construction sheets, consumer electronics, and new energy vehicles, have been slow. This limited innovation has contributed to an oversupply and pushed magnesium prices to near production costs.

Shifting Trends in Titanium Sponge Production

The use of magnesium in titanium sponge production has declined due to its environmental impact and price volatility. According to Jiang Baowei, lead engineer at Pangang Vanadium and Titanium Resources, many producers now use in-house magnesium obtained through electrolysis of titanium tetrachloride residue, reducing environmental pollution and stabilizing costs. In 2023, China’s titanium sponge production capacity reached 220,000 t/yr, supported by 250,000 t/yr of in-house electrolytic magnesium production.

Rising Production Amid Challenges

Despite these hurdles, China’s magnesium production rose to 702,900 tonnes during January-September 2024, an 18% year-on-year increase, fueled by resumed production in Shaanxi, the country’s largest magnesium-producing region. Output in Shaanxi grew by 14%, while neighboring Shanxi saw a 10% rise. Shaanxi alone houses 50 producers with a combined capacity of 678,000 t/yr, including 34 producers in Fugu County.

CMA’s Call to Action

Ge Honglin, CNMA president, urged the industry to emphasize magnesium’s benefits as a light structural metal and explore emerging markets like hydrogen storage and new energy vehicles. He also called for price stabilization to ensure affordability and reduce market volatility.

Sustainable Production Gains

The industry has made strides in energy efficiency, reducing the energy required to produce 1 tonne of magnesium from 5.2 tonnes of standard coal in 2012 to just 4 tonnes in 2023. Over the same period, magnesium consumption in structural materials more than doubled to 192,100 tonnes, contributing to a sharp rise in overall consumption, up by 76% since 2012.

China’s magnesium sector continues to grow in global prominence, but it faces an urgent need to diversify its applications, reduce environmental impacts, and stabilize pricing to maintain its leadership in the global market.

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.

LB Group Titanium Dioxide Output Rises in 2024 Amid Market Expansion Push

LB Group

LB Group, China’s largest titanium producer, increased its titanium dioxide output in 2024, aiming to expand its market share. The company produced 1.29 million tonnes of titanium dioxide last year, an 8.7% increase from 2023, according to its annual report released in April.

Surge in Sulphuric Process and Titanium Sponge Production

Most of the LB Group titanium dioxide output came from the sulphuric process, which accounted for 894,400t. The chlorination process contributed 401,100t. Sales also rose by 8.3% to 1.25 million tonnes, with a notable 12% increase in sulphuric-based products. Meanwhile, titanium sponge production soared by 35% to 69,700t, with sales up 43%, demonstrating strong downstream demand.

Titanium Concentrate Drives Vertical Integration Strategy

LB Group produced 1.49 million tonnes of titanium concentrate in 2024, using all of it for in-house conversion into titanium dioxide and sponge. This internal utilization strategy supports its vertical integration and reduces reliance on external feedstock. However, the company’s iron ore concentrate and iron phosphate segments declined, with output and sales falling by double digits due to weak demand.

The Metalnomist Commentary

The LB Group titanium dioxide output growth underscores its strategy to capture a larger share in China's expanding pigment and metal markets. By increasing utilization rates and internal feedstock use, LB is reinforcing its position as a vertically integrated global titanium leader.

China’s LB Group Increases First-Half Titanium Dioxide Output

China’s LB Group

China’s LB Group, the largest producer of titanium dioxide in the country, has ramped up its production in the first half of 2024 by increasing its capacity utilization to capture more market share. The company, which has a combined annual capacity of 1.51 million tonnes, produced 649,600 tonnes of titanium dioxide during the period, reflecting a 9.7% increase from a year earlier.

Breakdown of Production Processes

Of the total output, 453,700 tonnes were produced using the sulfuric acid process, and 195,900 tonnes via the chlorination process. While production through the sulfuric acid process rose by 6.2%, production through the chlorination process saw a slight decline of 1.7%.

LB Group also produced 33,100 tonnes of titanium sponge, a 29% increase from last year, with sales of 30,800 tonnes, up by 60%. Titanium concentrate production surged by 73% to 1.04 million tonnes, though the company uses all of it internally for producing titanium dioxide and sponge.

During the first half of 2024, LB sold 599,600 tonnes of titanium dioxide, up by 3.7% from the same period last year. Sales of sulfuric acid-based products increased, while chlorination-based products slightly decreased.

China’s titanium dioxide exports also grew, reaching 1.13 million tonnes from January to July, a 14% increase from the same period in 2023. July exports totaled 159,688 tonnes, marking an 18% increase from the previous year, though a 9.5% decline from June’s figures.

Iron Ore Output Declines

While titanium production surged, LB Group’s iron ore concentrate output dropped. The company produced 1.55 million tonnes of iron ore concentrate, down by 16% year-on-year, with sales also falling by 39% to 1.55 million tonnes.

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.

Titanium Exempted from US Tariffs: Aerospace Industry Impact Remains Unclear

Titanium

New US Tariff Exemptions for Titanium Could Affect the Aerospace Supply Chain

On April 2, 2025, US President Donald Trump announced new tariffs on several foreign imports, including an exemption for titanium, titanium scrap, and ferro-titanium. While the exemption helps protect titanium trade, the broader implications for the aerospace industry remain uncertain.

Titanium Exemption and Its Effects

The US tariffs announced include a list of exemptions, with titanium in its various forms being spared. However, other metals like hafnium, molybdenum, vanadium, nickel scrap, and aluminum scrap were not exempted. The new tariff scheme does not affect pre-existing duties on Chinese titanium products, including a 20% duty on titanium products from China, which has been in place since March 4, 2025. Despite the exemption for certain forms of titanium, Chinese titanium sponge imports will still be subject to a 60% duty, which remains unchanged.

Additionally, imports of unwrought titanium from Japan, Kazakhstan, and Saudi Arabia will still face a 15% tariff, though efforts to remove this tariff for sponge imports are underway. For US titanium scrap imports, particularly from the EU and UK, which make up over half of the US intake, the tariff exemption is crucial. Without it, US scrap dealers, processors, and consumers would face substantial challenges, as the US does not produce enough vacuum-grade titanium scrap domestically to meet demand.

Aerospace Industry and Supply Chain Impact

While the titanium exemption provides relief for many manufacturers, the broader impact of the tariffs on the aerospace industry is still unclear. Aerospace manufacturers are uncertain about the tariff's effects on finished parts, components, and engines, particularly regarding supply chains that involve cross-border production of engine parts like the Leap-1A and Leap-1B engines for the A320neo and Boeing 737 Max.

Canada and Mexico were excluded from the new US tariffs, alleviating concerns for companies like Bombardier, Airbus, RTX, and Heroux-Devtek, which operate in those regions. Still, some titanium producers believe the situation could change rapidly, as it is difficult to define the boundaries between parts made from titanium and assembled components that use other materials, such as nickel-based alloys or aluminum.

China’s 34% Tariff on US Exports

In response to US tariffs, China has imposed a 34% tariff on all US imports, which will affect titanium imports from the US. Despite importing limited amounts of titanium from the US, China still relies on US imports for critical aerospace components, including parts for its C919 aircraft. The C919 uses the CFM Leap-1C engine, which is assembled in both the US and France.