Western aerospace companies are increasing their titanium inventories and struggling to strengthen their supply chains in case the metals widely used in airplane manufacturing enter into a potential trade war between Russia and the West. doing.
Titanium, much of which comes from Russia, has been used in commercial jet engines and other components for decades.
However, its use has skyrocketed in recent years with the latest lightweight jets such as the Boeing 787 and Airbus A350, reaching 14-15% by weight of empty jet airliners.
Neil Mitchill, Chief Financial Officer of Raytheon Technologies, the world’s largest aerospace contractor, said he is “monitoring development” and is working to secure the supply chain for the next 12 months. rice field.
The Pratt & Whitney jet engine manufacturer said it had more than one source of titanium and other major raw materials, but did not provide further details.
Boeing, which relies heavily on Russian titanium giant VSMPO-AVISMA, “has been protected for quite some time, but not permanently,” CEO Dave Calhoun said Wednesday. ..
Western aerospace companies have increased inventories and diversified sources since 2014, when Russia was sanctioned for the annexation of Crimea from Ukraine, even if titanium was not directly targeted, according to industry sources. There is.
Their situation was eased by the fact that as a result of the pandemic, fewer jets were assembled and the opportunity to stockpile stockpiles was given.
“During the Crimean crisis, everyone created a second source of safety stock and titanium, but in the end nothing happened (in terms of sanctions),” said senior European industry sources. ..
Once Cold War materials were used to build reconnaissance aircraft and submarines, titanium is widely seen as a test case for economic interdependence in strategic sectors such as civil aerospace.
At the Dubai Airshow in November, Boeing agreed to tentatively renew its 20-year partnership with VSMPO-AVISMA and maintain it as the largest titanium supplier.
The world’s largest producers supply 25% of the world’s demand for titanium, a lightweight yet powerful and corrosion-resistant metal that is also used in nuclear energy.
The same two companies have also agreed to increase the use of joint ventures in Russia’s Titanium Valley in the Urals.
Airbus and Embraer of Brazil also have long-term contracts with VSMPO-AVISMA.
“We are closely tracking the situation,” Airbus said.
VSMPO-AVISMA and Embraer said there were no immediate comments.
Airbus said it relies on Russia for half of its titanium requirements, but US industry sources said VSMPO-AVISMA provided one-third of Boeing’s requirements.
VSMPO-AVISMA accounts for about three-quarters of aerospace sales, despite its diversification efforts.
In 2018, a Russian parliamentary bill proposed to limit titanium exports in response to increased Western sanctions.
However, the country’s trade minister was reported to have said the idea was blocked to prevent the loss of stable foreign buyers.
Still, the consequences of a trade war that could occur if tensions boil are difficult to predict, and stakes will increase as the United States threatens to target major Russian gas pipelines.
S & P said last year that Russia could restrict exports of strategic materials due to tensions, but this was not the most likely case.
The West also said in a report that it is unlikely to suspend trade as it will take years to certify alternative suppliers.
The US Department of Commerce imposed restrictions on VSMPO-AVISMA in December 2020 and only revoked them after three weeks.
Targeting VSMPO-AVISMA identifies strategic assets that are closely linked to Russia’s defense industry, but Western aerospace companies quickly backfire, according to industry sources.
http://www.gulf-times.com/story/708846/Aerospace-firms-face-turbulence-in-Russian-titaniu Aerospace companies face turmoil in Russia’s titanium supply