All this to avoid new bottlenecks to production, precisely in a moment of post-pandemic recovery
Boeing, Airbus and not only: the main ones aerospace companies are stocking up on titanium from Russia. L’escalation of tension on the borders ofUkraine in fact they cause fear of possible sanctions against flywhich is currently one of the world’s largest producers of the metal.
To avoid a stop at engine productionwhich currently have titanium percentages ranging from 14 to 15%, companies such as Boeing, Airbus and others are filling up warehouses with stocks from its Russian suppliers. All to avoid new bottlenecks to production, just as the entire aerospace industry seems to be recovering after the restrictions due to pandemic. The crisis also pushed the price of nickel which reached $ 24,610 per ton, this is the highest level since August 2011, with the Russia which is one of the main producers of the “devil’s metal”.
THE TITANIUM VALLEY
There Russia is aware of the importance of titanium for Western companies. In the oblast of Sverdlovskwhich extends over an area to the east ofthe Urals, a special economic region was created called “Titanium Valley“.
There Duma has put on the table 1.29 billion dollars to create adequate infrastructures for the extraction and processing of the metal, currently used for the production of aircraft, machines, ships but also for the medical industry.
In the main city of the area, Verchnajaja Saldais based there Vsmpo-Avisma, currently the largest titanium producer in the world with an annual turnover that exceeded one and a half billion in 2019 and employs 20,000 people. There Russia is the third largest producer of machined titanium in the world, after China and Japan, while among the countries rich in the mineral there isUkrainethe ninth largest titanium reserve in the world.
TITANIUM FOR BOEING AND AIRBUS
Vsmpo-Avisma and the titanium supplier for Boeing. The American giant last month reassured that it had enough stocks for the next few months, but also specified that obviously the stocks will not last forever. The Russian company also supplies Airbus, the Brazilian Embraer and dozens of other companies linked to the aerospace industry.
Many of these contracts were renewed last November during the Dubai Airshow, tying hands to companies that currently depend on each other. Alone Vsmpo-Avisma it supplies 25% of the world titanium production, of which three quarters end up in the aerospace sector, despite several attempts to diversify its customer portfolio.
A DOUBLE WIRE BOND, DIFFICULT TO BREAK
The close relationships between Vsmpo-Avisma and the world’s aerospace giants explain how difficult it is for the Russia that for Western countries to break off relations on the titanium axis. Not that they haven’t tried, but never successfully. fly for example, it tried to stop the export of the metal in response to the 2014 Western sanctions, which came after the annexation of Crimea, but the bill was scuttled by the Ministry of Commerce.
Even the USA they attempted to enter Vsmpo-Avisma among the companies subject to restrictions in 2020, but had to abandon the proposal two weeks later due to the negative effects that the measure would have had on entire pieces of American industry. At the moment exporters need the companies of the importers, and neither do the winds of war on the Ukrainian border they stopped industrial relations, which in fact intensified to allow them to increase stocks. However, it is not clear how much titanium have put aside the aircraft manufacturers, a given that the companies they reserve the right to disclose.
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