其他服務業Business News

In the first five months of 2024, the European Union (EU) reduced imports of titanium from Russia by 22% in annual terms to 2,461 tons. This is evidenced by fresh data from the European Statistical Agency (Eurostat). At the same time, in May, supplies increased by almost a third compared to April - to 578 tons. In particular, France increased supplies from Russia by 3.4 times to 266.6 tons, Italy - more than 2 times to 32.3 tons, Germany – by 20% to 213 tons.

After the start of the SVO, the world's largest aircraft manufacturing corporations announced plans to completely abandon titanium from the Russian Federation. In March 2022, the American aviation concern Boeing announced its intention to abandon purchases of Russian metal, and in December of the same year, the European Airbus. In December 2023, Reuters sources reported that Airbus began purchasing more titanium from the United States and Japan.

The EU did not prohibit the import of Russian titanium, but in September 2023, the US Department of Commerce included the Russian titanium corporation VSMPO-Avisma on the Export Administration Regulations (EAR). This means that the company must obtain separate licenses from US authorities to carry out export transactions.

VSMPO-Avisma is the world's largest full-cycle titanium producer. The corporation is owned by businessman Mikhail Shelkov, who owns 66.5% of the shares (directly and indirectly). Another 25% belongs to the state corporation Rostec; minority shareholders own the remaining 10%. The company's main production facilities are located in Verkhnyaya Salda (Sverdlovsk region), where about 72,000 tons of titanium ingots are produced annually. Exact data on the company's capabilities to produce titanium sponge, which serves as a primary metallurgical raw material, are unknown.

In 2021 (latest available data), four Russian companies produced more than 50,000 tons of titanium ingots, increasing production by 22%. About 90% of this volume came from VSMPO-Avisma. Titanium is also produced by the Stupino Titanium Company, Chepetsk Mechanical Plant and Ruspolimet.

In 2020, supplies to the EU accounted for more than a quarter of all VSMPO-Avisma exports – 10,212 tons. According to the European Commission, in 2021, Russia’s share in titanium imports to the EU was about 16% for finished products and 9% for primary raw materials. The total export volume of VSMPO-Avisma to the European Union, excluding other companies, amounted to 6,921 tons in 2021. According to Eurostat, in 2023, the volume of supplies of Russian titanium to the EU countries decreased by 20% to 6,410 tons.

Before the start of the SVO in Ukraine, VSMPO-Avisma provided up to 65% of Airbus’s needs and 35% of Boeing’s needs for titanium, as well as 100% of the needs of the Brazilian Embraer. Approximately 20% of Russian titanium was used by the British Rolls-Royce, and 50% by the French Safran. The company had a joint venture with Boeing, Ural Boeing Manufacturing, which processed parts for the Boeing 787 Dreamliner. His current status is unknown. 

The growth in titanium imports in monthly terms from Russia is due to the relatively modest capacities for its production in the EU, notes independent industrial expert Leonid Khazanov. Europeans have not yet been able to certify titanium supplies for the aviation industry from alternative suppliers in full, notes Maxim Khudalov, chief strategist at the investment company Vector X. “The EU’s complete abandonment of Russian titanium is possible within 5–7 years and does not lead to significant risks for the EU economy, but an earlier refusal threatens to disrupt the supply of airliners,” he notes.

Import of titanium by EU from Russia in thousand tons          Source: Eurostat

Year	2018	2019	2020	2021	2022	2023	2024
Import	11,4	9,7	6,7	6,3	8	6,4	6

Import Genius research director William George said in March 2024 that stopping supplies from Russia could threaten the operations of companies critical to national defense and EU civil aviation.

An increase in supplies of Russian titanium to France and Italy in May may be due to strong demand for it from local engineering enterprises, says Khazanov. The French Safran Group, one of the world's leading manufacturers of aircraft engines, is experiencing a shortage of this metal, the expert believes. At the same time, products from alternative suppliers are often more expensive, the analyst notes. Finam Strategy Director Yaroslav Kabakov adds that Russia is constantly improving the quality of its products. For example, in June, VSMPO-Avisma launched a new forging complex with a capacity of 4,000 tons per year.

According to Kabakov, titanium imports from Russia to the EU in 2024 will either remain at the 2023 level or increase slightly due to the high demand for this metal. Among the main factors that could affect the dynamics, he names new sanctions. Khudalov believes that in 2024, Russian titanium exports to the EU will amount to 5,000–6,000 tons, i.e., will be 6–22% lower than in 2023.

Source: https://www.vedomosti.ru/business/articles/2024/07/22/1051295-eksport-rossiiskogo-titana-v-es?utm_campaign=newspaper_22_7_2024&utm_medium=email&utm_source=vedomosti