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.

Osaka Titanium Export Sales Target 15% Growth Despite Market Headwinds

Osaka Titanium

Osaka Titanium export performance targets significant improvement with projected sales rising 15% to ¥37.7 billion for fiscal 2026. The Japanese titanium producer's Osaka Titanium export strategy focuses on aerospace sector demand, particularly from European aircraft manufacturer Airbus, as the company seeks to offset domestic market weakness and Boeing-related disruptions.

Aerospace Demand Drives Export Optimism

Osaka Titanium export revenues benefit from sustained aerospace industry requirements across multiple segments. Titanium sponge demand from Airbus remains robust, supporting the company's international sales projections for the current fiscal year. Additionally, maintenance, repair, and overhaul (MRO) services for aircraft engines continue generating strong titanium product demand.

Meanwhile, export sales represent approximately 86% of Osaka Titanium's total titanium business revenues. This heavy international focus positions the company to capitalize on global aerospace recovery trends while reducing dependence on volatile domestic markets. However, the company maintains confidentiality regarding actual export volume data.

Boeing Disruptions Impact Previous Performance

Nevertheless, Osaka Titanium faced challenges in the previous fiscal year ending March 2025. Export sales declined 4% year-on-year to ¥33.5 billion ($231 million), primarily due to operational disruptions at Boeing facilities. A seven-week strike at Boeing's Washington factories significantly impacted titanium demand throughout 2024.

Therefore, the company's current optimism reflects expectations that aerospace sector recovery will overcome lingering Boeing-related headwinds. Osaka Titanium sources raw materials from diversified global suppliers including Canada, Australia, India, and African nations, providing supply chain flexibility for international operations.

Pricing Pressures Challenge Revenue Projections

However, potential pricing adjustments could affect Osaka Titanium export revenue targets despite volume growth expectations. Company representatives indicated possible titanium product price reductions for export markets, driven by declining raw material costs and titanium ore price index movements. These pricing pressures suggest potential downward revisions to sales outlook projections.

Furthermore, domestic titanium sales face significant headwinds with overall revenues projected to decline 3% to ¥43.9 billion. Weak domestic demand for ordinary industrial applications and ongoing inventory adjustments weigh heavily on the Japanese titanium market, reinforcing the strategic importance of export growth.

The Metalnomist Commentary

Osaka Titanium's export-focused strategy exemplifies how specialized metals producers navigate market volatility through geographic diversification and aerospace sector positioning. While Boeing's operational challenges created near-term disruptions, the company's emphasis on European aerospace partnerships and MRO services demonstrates strategic adaptation to evolving industry dynamics in the critical titanium supply chain.

Aerospace OEMs Look to Reduce Dependency on Russian Titanium

VSMPO

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

The Shift Away from VSMPO-AVISMA 

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

Airbus Multi-Sourcing Strategy

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

Safran

Safran’s Progress Toward Decoupling 

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

Challenges of Securing Alternative Supplies 

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

Boeing and the U.S. Response 

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

RTX

The Role of Nickel and Titanium in Aerospace 

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

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

Future Prospects for Titanium Supply 

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

Uncertainty Around Russian Export Restrictions 

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

Ferro-Titanium Section 232 Tariffs Requested by US Producer Galt Alloys

Galt Alloys

Galt Alloys petitioned the Commerce Department to include ferro-titanium Section 232 tariffs on imports. The Ohio-based producer argues foreign shipments depress domestic production and market prices significantly. This ferro-titanium Section 232 tariffs request could transform the US specialty alloys market dynamics.

Domestic Capacity Meets US Steel Industry Demand

Galt and Michigan-based AmeriTi possess sufficient capacity to supply America's annual requirements completely. The US imported only 2,022 tonnes of ferro-titanium in 2024, down 50% from 2021. Meanwhile, Canada, Estonia, Latvia, and the UK supplied 94% of total imports. These nations ship primarily powdered ferro-titanium, a premium product over lump form.

Import costs could increase 50% if tariffs apply after Trump doubled steel rates. Currently, ferro-titanium carries only a 3.7% general duty rate versus steel's 25%. Furthermore, the alloy remains exempt from Trump's "Liberation Day" measures entirely. The USMCA agreement also protects Canadian ferro-titanium from additional duties presently.

Strategic Implications for US Steel Manufacturing

Ferro-titanium acts as a critical deoxidizer and desulfurizer in steel production processes. The alloy contains 70% titanium with iron comprising the remaining balance. Therefore, securing domestic supply strengthens America's steel manufacturing independence and competitiveness. Galt claims imports prevent domestic expansion and profitability despite US price premiums.

Foreign producers contest dumping allegations with Latvia's LLR expecting no specific actions. However, the ferro-titanium Section 232 tariffs proposal aligns with broader protectionist policies. As a result, US steel producers face potential cost increases for essential inputs. Stakeholders must submit comments on Galt's petition by June 4th deadline.

The Metalnomist Commentary

Galt's petition highlights the delicate balance between protecting domestic producers and maintaining competitive input costs for downstream manufacturers. With only two US ferro-titanium producers versus diverse import sources, tariffs could create supply vulnerabilities and price spikes. The 50% import decline since 2021 suggests market forces already favor domestic production without additional protection.

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.

BaoTi Boosts Titanium Mill Products Output and Sales in 2024

BaoTi

Strong Demand from 3C, Aerospace, and Energy Sectors Drives Growth

China’s largest titanium producer, BaoTi, significantly increased its titanium mill products output in 2024. The company responded to higher demand from the computer, communication and consumer electronics (3C), aerospace, power, and shipbuilding sectors.

BaoTi produced 33,600 tons of titanium mill products last year, marking a 12% rise from 30,000 tons in 2023. The company plans further growth, targeting 43,000 tons of production by 2025.

Sales also grew steadily. BaoTi sold 31,300 tons of titanium mill products in 2024, a 6.5% increase from 29,400 tons the previous year.

Aerospace Leads Titanium Consumption Growth

China’s total consumption of titanium mill products reached 151,000 tons in 2024, up 1.6% compared to 2023. The aerospace sector posted the largest growth, consuming 32,193 tons, up by 2,816 tons from a year earlier. The power industry followed, with a 1,364-ton increase to 8,453 tons, driven by the new energy sector’s development.

Meanwhile, the 3C industry saw a 10% rise in titanium usage, reaching 11,000 tons in 2024. Domestic producers secured major orders from companies like Apple, Samsung, and Huawei, boosting demand.

The shipbuilding sector also expanded its titanium consumption by 1,191 tons, totaling 4,933 tons last year.

Global Titanium Output Rises Alongside China's Growth

China’s 32 major titanium manufacturers produced 172,000 tons of mill products in 2024, up 8.1% from 2023. Globally, titanium mill product output climbed by 8%, reaching 260,000 tons according to preliminary estimates.

Organizations such as CNIA-Ti, the CIS Titanium Association, and the Japan Titanium Association contributed to these global estimates. Stay tuned with The Metalnomist for more updates on global titanium market dynamics.

Toho Titanium Reports Strong 1H24 Sales on Robust Titanium Demand

Toho Titanium

Toho Titanium Records Growth in Sales and Operating Profit

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

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

Key Growth Drivers: Aviation and Semiconductor Recovery

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

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

Positive Market Outlook for Titanium

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

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

IperionX Expands Forging Capacity to Meet Growing Titanium Demand

IperionX

US Titanium Producer Advances Production Capabilities and Technology for Enhanced Efficiency

IperionX, a leading US titanium producer, is significantly expanding its forging capacity to meet the rising demand for high-quality, near-net-shape titanium products. The company has recently commissioned a new 100-metric ton uniaxial hydraulic press and is set to acquire additional critical equipment in late 2024 to further boost production.

These expansions follow IperionX's breakthrough in enhancing its titanium angular powder production process. This innovation aims to increase output beyond its current capacity of 125 metric tonnes per year, with expectations for further growth by late 2025. As a result, the company is positioning itself for greater market demand, particularly from industries seeking specialized titanium products.

IperionX's Hydrogen-Based Technology Brings Efficiency Gains

One of the key factors driving IperionX's expansion is its proprietary hydrogen sintering and phase transformation (HSPT) technology. This cutting-edge process allows the company to produce products with "forged-like" quality while maintaining lower costs compared to traditional ingot-to-forging manufacturing methods. The company's approach offers an efficient, innovative solution to meet the needs of various industries, including aerospace and defense.

IperionX has already started ramping up its pressing and sintering capabilities in 2025, ensuring faster product commercialization. Additionally, the company has significantly increased its prototyping and validation efforts to keep up with growing demand and to fine-tune its production processes.

Looking to the Future: Machining and New Alloys

IperionX is also exploring opportunities to expand its offerings further down the value chain. The company has received increasing interest from industrial and defense sectors for products such as titanium fasteners. As a result, IperionX is evaluating the addition of machining capabilities to better serve these markets.

Additionally, the company is reconfiguring its pilot plant in Salt Lake City, Utah, to focus on producing new titanium alloys, including those incorporating zirconium, tantalum, and niobium. This move reflects IperionX’s commitment to diversifying its product range and strengthening its competitive position in the titanium market.

In conclusion, IperionX is setting the stage for a significant increase in production capacity and product innovation. With its advanced technologies and strategic expansions, the company is poised to meet the surging demand for titanium products in the coming years.

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 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.

Uncertainty Looms Over Russian Ferro-Titanium Market Amid EU Sanctions

Ferro-Titanium (Fe-Ti)

The European ferro-titanium (FeTi) market is facing a period of uncertainty as the EU sanctions on Russian ferro-alloys are set to be fully enforced. Market participants are divided over whether the sanctions will have a lasting impact on Russian FeTi supplies or if the overhang of Russian units in Europe, coupled with low demand from steel mills, will continue to create downward pressure on prices in 2025. A key point of concern is the potential for circumvention, with fears that Russian material may be rerouted or rebranded through non-EU countries.

Legal Framework and Market Response to Sanctions

Under the sanctions, ferro-titanium imports from Russia that were contracted before 19 December 2023 and presented to customs before 20 December 2024 may still enter free circulation within the EU. However, despite the clear framework outlined in Council Regulation 833/2014, uncertainty continues to surround how the market will react once these conditions change.

"Everyone is waiting for 20 December, it seems nobody understands what will happen," commented a European producer. There is significant ambiguity as to how the market will balance the loss of Russian material, particularly in light of high inventories of Russian ferro-titanium already present in warehouses in the Netherlands, Estonia, Latvia, and Germany. Imports in 2024 have already been lower than in previous years, but it remains unclear where the remaining stock will end up, especially as many buyers continue to avoid Russian FeTi.

Trade Dynamics and Impact on the Market

Despite sanctions, imports of Russian ferro-titanium to the EU remained significant in 2024, particularly in Estonia, Germany, and the Netherlands. In fact, Estonian imports in October 2024 reached a 10-year high of 591 tonnes, signaling that sanctions have not entirely stopped the flow of Russian material into the EU. Westbrook Resources, a UK producer, has called for increased vigilance among buyers to ensure they are not inadvertently purchasing smuggled or rerouted material, highlighting the difficulty of tracking the origin of ferro-titanium in the current market environment.

As of 20 December 2024, no fresh Russian ferro-alloys will be allowed into the EU, leading to a projected loss of 766 tonnes per month based on 2023 averages. While EU and UK producers may be able to cover this shortfall with unused capacity, the reduction in available supply is likely to increase demand for raw materials, driving up prices for scrap and raising production costs for ferro-titanium. However, overall demand from steel mills and cored wire manufacturers has been weak, due to an economic downturn and lower steel prices. This will likely temper any significant price increases, though temporary spikes may occur if first-quarter tenders prompt urgent purchases.

Circumvention Risks: Material Rerouting and Relabelling

Despite the official ban on Russian ferro-titanium imports, there are ongoing concerns about circumvention. The EU regulation explicitly prohibits releasing goods if there are grounds to suspect circumvention, but market sources argue that loopholes remain. Materials may be rerouted, relabelled, or blended through countries such as Turkey, India, China, or Kazakhstan, creating a potential grey market for Russian FeTi in Europe. Chinese imports of Russian ferro-titanium have already been on the rise, suggesting that circumvention may already be in play, though Europe has not yet seen significant volumes of these rerouted materials.

Logistics challenges, including the extra costs of rerouting and repackaging, may limit the feasibility of circumvention unless steel prices in Europe increase. Additionally, there are reports that Russian producers may shift to exporting titanium scrap, a material not covered under the EU sanctions. This could provide an alternative route for Russian producers to bypass restrictions, further complicating the market dynamics.

Conclusion

As the sanctions on Russian ferro-titanium fully come into force in December 2024, European market participants remain in a state of uncertainty, unsure of how the market will respond to the loss of Russian material and the potential for circumvention. While EU producers may absorb some of the shortfall with existing capacity, broader market conditions, including weak demand from steelmakers and rising production costs, could create a complex and volatile pricing environment.

IperionX to Raise $67 Million for Expanding Titanium Operations

IperionX

Integrated titanium producer IperionX, based in North Carolina, announced plans to raise A$100 million ($67 million) through a stock placement on the Australian Securities Exchange (ASX). The funds will support the expansion of its titanium manufacturing operations in Virginia, bolstering its capabilities in titanium production and processing.

Allocation of Funds

The proceeds from the stock sale will be used for:

• Expansion of the Virginia titanium complex through feasibility studies and equipment upgrades.
• Intellectual property acquisitions.
• Working capital and other corporate needs.

The company disclosed that 31.25 million new shares will be issued in two tranches. Approximately 30.7 million shares are scheduled to be issued on October 25, while an additional 593,750 shares, valued at about $1.3 million, will be issued to IperionX executive chairman Todd Hannigan, pending shareholder approval.

Strategic Investment for Titanium Growth

This capital raise aligns with IperionX's strategy to scale its titanium operations, leveraging its proprietary technologies for low-carbon, sustainable titanium production. The Virginia facility, a key part of IperionX's integrated titanium supply chain, aims to meet growing demand for titanium across industries such as aerospace, defense, and additive manufacturing.

The move further cements IperionX’s position in the global titanium market, as the company continues to innovate and expand its production capacity in the U.S.

China Titanium Mill Products Output Rises Sharply in 2024

Baoti Titanium

China titanium mill products output surged in 2024 as domestic and global demand increased across multiple industries. Leading producer BaoTi boosted its titanium mill production by 12% year-on-year, reaching 33,600 tonnes, with plans to expand to 43,000 tonnes in 2025. The company also raised sales by 6.5% to 31,300 tonnes last year.

Rising Demand from Aerospace and 3C Industries

The China titanium mill products output increase was driven by rising demand from the aerospace, 3C (computer, communication, and consumer electronics), and power sectors. Aerospace was the top contributor, with titanium usage climbing by 2,816 tonnes to 32,193 tonnes, accounting for over 21% of national consumption. The 3C sector followed with a 10% rise, reaching 11,000 tonnes, as major global brands like Apple, Samsung, and Huawei sourced titanium parts from Chinese producers.

Global Titanium Market Follows Upward Trend

China's 32 major manufacturers produced a combined 172,000 tonnes of titanium mill products in 2024, reflecting an 8.1% increase. This growth aligned with global trends, as worldwide titanium mill product output rose by 8% to 260,000 tonnes. The shipbuilding sector also showed robust demand growth, consuming 4,933 tonnes—up by 1,191 tonnes compared to 2023. Meanwhile, China's power industry added 1,364 tonnes of new titanium demand, driven by energy transition investments.

The Metalnomist Commentary

China titanium mill products output continues to reflect the nation’s growing dominance in high-performance metal markets. With expansion plans underway, China is poised to further strengthen its position across aerospace, electronics, and energy applications in 2025 and beyond.

Pangang Boosts Vanadium and Titanium Dioxide Output in 2024 Amid Price Decline

Pangang Group

Pangang Increases Output of Vanadium and Titanium Dioxide

Pangang Group, China’s third-largest titanium dioxide producer, raised output in 2024 despite lower spot market prices. The company produced 252,900t of titanium dioxide, up 0.8% year-on-year, including 26,900t via chlorination. Vanadium pentoxide output rose by 7.3% to 53,400t, while sulphate titanium slag production fell 6% to 181,800t.

Revenue Falls Despite Strong Output Gains

Pangang’s 2024 revenue fell by 8.2% year-on-year to 13.2 billion yuan ($1.82 billion), hit by weaker vanadium and titanium prices. The company’s current capacities include 1.8 million t/yr for titanium concentrate, 220,000 t/yr for slag, and 300,000 t/yr for titanium dioxide. Chlorination-based production contributes 75,000 t/yr, showing Pangang’s focus on high-purity product diversification.

2025 Targets Set Higher for Titanium Dioxide

Pangang plans to produce 52,500t of vanadium pentoxide and 290,000t of titanium dioxide in 2025. Of the total, 64,500t will be chlorination-grade material, while titanium slag output is forecasted to hit 192,000t. Meanwhile, export prices for 93% rutile-grade material rose to $2,100–2,150/t fob China, tracking domestic price strength.

The Metalnomist Commentary

Pangang’s output growth amid a low-price environment reveals a strategic push to preserve market position. While profitability took a hit, the company’s expanded production and chlorination investment could position it well for a rebound in global demand. Titanium and vanadium markets should monitor Pangang’s moves closely in 2025.

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.

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.

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.

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.

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.

FE Mottram Acquires Metals & Alloys International, Expanding Ferro-Titanium Market Share

Metraco

UK-Based Producer Expands Operations in Sheffield, Despite Market Challenges

UK-based ferro-titanium producer FE Mottram, a subsidiary of Belgian trading company Metraco, has successfully acquired Sheffield-based Metals & Alloys International (MAI). This acquisition boosts FE Mottram's position in the ferro-titanium market, aligning with its strategy to expand its market share in this niche industry.

MAI Continues Operations as a Subsidiary

Following the acquisition, MAI will continue to operate as a subsidiary of Mottram, maintaining its relationships with customers in the steel and cored-wire industries, as well as its raw material suppliers. Both companies will continue processing scrap and producing ferro-titanium at Tivac's two locations in Sheffield, ensuring a seamless transition.

Olivier Esquenet, director of Mottram, now holds the controlling interest and directorship of MAI. Graham Mee, MAI’s former co-owner and co-director, will remain on board as a director, along with Metraco's chief financial officer, Erwin Debaere. This leadership continuity is expected to help maintain stability during the integration process.

Combined Production Capacity and Market Challenges

The combined capacity of FE Mottram and MAI stands at 1,200 tonnes per month, but current capacity utilization is slightly over half due to market competition. The emergence of rebranded Russian ferro-titanium and weak demand from steel mills have contributed to these challenges. Despite this, the acquisition strengthens Mottram’s foothold in the ferro-titanium sector.

Mottram’s parent company, Metraco, also operates a ferro-titanium production facility in Ahtme, Estonia, known as Ti Q. However, Mottram did not acquire MAI's separate crushing facility, Alloy Masters, located in Telford. This facility remains under the ownership of Graham Mee and investor Richard Dajczak.

It is important to note that Metals and Alloys UK, a different company focused on scrap recycling, is not affected by this acquisition.