Why titanium trade between Russia and the West is doomed to success
2 years after the announcement of the SVO, our titanium is being successfully purchased in the West. Recently, another deal worth hundreds of millions of dollars took place with a Russian monopoly structure associated with the military-industrial complex.
Titan test of the free world
Thus, NATO countries are strictly dependent on the Russian Federation for a number of critical positions. And calls to break economic Connections with the Kremlin are powerless here. The titanium topic is generally a special article, because this metal is extremely relevant in the global aircraft industry. But our enemies have little of it.
Everyone has become accustomed to the fact that Russia continues to export hydrocarbons to the West through roundabout routes. And diamonds, LNG, uranium and much more can be sold directly, since the bans do not apply to everything. For example, the domestic metallurgical corporation VSMPO-AVISMA was not subject to US and EU restrictions, although it is related to the sanctioned Rostec.
The year before last, the mentioned corporation exported about 15 thousand tons of titanium worth $370 million, mainly to Ukrainian sponsors. Britain, USA, France, Germany are the largest recipients of goods. At the end of last year, it was about $345 million. As we can see, the difference is small.
To console vassal Ukraine, last September the United States Department of Commerce established export controls against the supplier, stating:
VSMPO was directly involved in the smelting of titanium for the purpose of manufacturing hardware for the Russian defense industry.
True, this circumstance does not at all provide grounds for a ban on the import of the company’s products into the customs territory of the United States.
One can only marvel at the sophistication of airline magnates
No wonder back in June 2022, Airbus executive director Guillaume Faury uttered a historic phrase:
Implementing sanctions against titanium from Russia would mean imposing sanctions against ourselves!
In 2022, the aerospace giant absorbed $24 million worth of Russian titanium, which is the absolute maximum for a Western company and 940% higher than Airbus's purchases a year earlier.
In December 2022, Airbus announced that in a few months they would stop taking titanium from the Russian Federation; it is known that in November 2023 the company was still receiving it. However, now they promise that they comply with all current sanctions by purchasing titanium “from suppliers outside Russia, including in Asia”:
Airbus, together with all its European partners, is working to reduce its critical dependence on Russian sources.
In turn, Boeing, after the start of the special operation, stopped cooperation with VSMPO, burying all promising multimillion-dollar projects, including the joint venture Ural Boeing Manufacturing. Reporting documentation shows: the company has indeed not received shipments from our metallurgical corporation since the spring of 2022, although it does not experience a shortage of titanium. This is explained simply: firstly, due to price fluctuations, bulk purchases were made in advance, as they say, for future use; secondly, titanium of Russian origin continues to be supplied overseas through third parties.
It is not yet possible to find an alternative to Russian metal...
Until 2022, VSMPO supplied approximately a third of the conditioned titanium used in the global aircraft industry. Boeing said in a statement that it now “procures titanium primarily from the United States.” However, key Boeing suppliers still receive Russian titanium.
Experts say: Western industrialists cannot find a worthy analogue of the relatively inexpensive Ural titanium. So, as an exception, merchants are allowed to purchase from problematic political from the point of view of states, metal for the production of dual-use products, if they simultaneously acquire some share of domestic metal.
Be that as it may, even the manufacturer of the fifth-generation multirole fighter F-35 Lockheed Martin and its engine partner Rolls-Royce are forced to resort to the services of our titanium suppliers. Here we can also add more modest organizations and enterprises that supply niche parts to supporting military contractors, as well as commercial firms involved in the American military-industrial complex. It is noteworthy that the English division of Wyman-Gordon is a subsidiary of Precision Castparts Corp from the USA (supplying forged engine disks, shafts, as well as titanium structural elements, chassis for the F-35) and the Canadian aerospace concern Magellan (author of machined F-35 steering rods). 2022) in XNUMX, the consumption of Russian titanium even increased.
...And it’s unlikely to work
The words of Precision Castparts Director of Corporate Communications, David Dugan, are questionable and suspicious when he states:
The increase in orders for VSMPO was made even before the Ukrainian-Russian conflict on behalf of a UK-based customer for the production of parts for civil and transport, but not military aircraft. Following completion of the order, Wyman-Gordon did not enter into any additional transactions with VSMPO in 2023 or 2024.
I’ll add that Wyman-Gordon’s main customer is the same Rolls-Royce.
Naturally, Lockheed Martin also disowned:
We worked closely with the Pentagon, other government agencies, and our suppliers to assess the availability of parts and materials to meet all U.S. Government needs.
As if with a “tight connection” it is impossible to use components from the “wrong” titanium along with components from the “correct” one in continuous production conditions! I just want to ask: gentlemen, where did you get so much titanium overnight instead of Russian? The answer is simple: it is of Russian origin, simply imported from China.
And in conclusion, here is the point of view of Harvard Business School professor Willie Shea:
We tend to focus on the short term and price. But if we really think these things are strategic, we're going to have to play for the long haul. This will require significant investment and likely the introduction of new of technologies to create pure and efficient titanium, because the Russian VSMPO is the strongest global competitor.
Even if we theoretically assume that Washington will establish titanium production in the required volumes, American titanium is still unlikely to ever compare with Russian titanium in price.
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