The escalating conflict between Russia and Ukraine has triggered market concerns about the titanium supply chain, mainly because Russia and Ukraine are the main suppliers of titanium. Except for a small amount to meet domestic demand, most of the exports provide global customers with sponge titanium or titanium materials. Once the situation deteriorates, in addition to the impact on titanium production in the region, subsequent sanctions from Europe and the United States will likely limit the export of Russian titanium metal, which will lead to a tight supply of titanium metal in the market and trigger a panic purchase and hoarding by downstream buyers. At present, the price of magnesium ingot, the main raw material of titanium metal, remains high, coupled with severe global inflation, driven by the sharp rise of other non-ferrous metals, copper, aluminum, and nickel, the price of titanium metal will likely rise.
Russia Avisma (VSMPO) is the world's largest sponge titanium producer with an annual production capacity of 34,000 tons/year. It is also the world's largest titanium producer, accounting for more than 20% of the world's titanium market share. A major supplier of the titanium used in Airbus and Boeing aircraft skins is the company that supplies a significant portion.
The Ukrainian Zaporozzi Titanium and Magnesium Joint Enterprise is a titanium sponge factory with an annual production capacity of 12,000 tons. It will export 1,527 tons of titanium sponges to China in 2020, accounting for 32.34% of China's total imports of titanium sponges.
Due to the complex smelting technology and the difficulty of processing, only the United States, Russia, Japan, and China have mastered the complete titanium industrial production technology in the world at present, forming a pattern in which the top four dominate. In addition, although there is no sponge titanium industry in Europe, titanium processing and application technology is at the world's advanced level. Ukraine and Kazakhstan inherited part of the former Soviet Union's titanium sponge industry.
In 2020, China's export volume of titanium sponge was 548.5 tons, a year-on-year decrease of 47.6%. The import volume of titanium sponge in China was 4,722.6 tons, a year-on-year decrease of 33.9%.
Among them, in 2020, the import volume of China's titanium sponge to most countries is Kazakhstan, with an import volume of 2,310 tons, accounting for 48.91% of China's total import of titanium sponge; followed by Ukraine's import of titanium sponge with a volume of 1,527 tons, accounting for China's total import of titanium sponge The volume is 32.34%; again, Japan imported 800 tons of titanium sponge, accounting for 16.94% of the total imported titanium sponge in China.
