Boeing suspends Russian titanium while Airbus keeps buying

FILE PHOTO: FILE PHOTO: An Aeroflot Boeing 777-300ER is reflected in a puddle at Sheremetyevo International Airport outside Moscow
FILE PHOTO: FILE PHOTO: An Aeroflot Boeing 777-300ER airplane is reflected in a puddle at Sheremetyevo International Airport outside Moscow, Russia, July 7, 2015. REUTERS/Maxim Shemetov/File Photo/File Photo

March 7, 2022

By Aishwarya Nair and Tim Hepher

(Reuters) – Boeing Co said on Monday it had suspended purchases of titanium from Russia, while its European rival Airbus continued to use supplies from the nation home to the world’s largest supplier of the commodity, VSMPO-AVISMA. The US planemaker said it has a “significant” inventory of metal, which is valued in the aerospace industry for its strength-to-weight ratio and its compatibility with the latest generation of long-haul carbon fiber passenger planes. “We stopped buying titanium from Russia. Our inventory and variety of titanium sources provide an adequate supply for aircraft production,” Boeing said in an emailed statement. The suspension was previously reported by the Wall Street Journal. The head of the state-controlled VSMPO-AVISMA criticized Boeing’s decision to suspend the contract, which was renewed four months ago at the Dubai Airshow, where Boeing vowed to keep the Russian company as the largest supplier of titanium.

The two companies had also agreed to increase use of a joint venture to manufacture forgings – Ural Boeing Manufacturing – in Russia’s Titanium Valley in the Urals. “We sincerely regret that the contracts with our long-term partner are suspended,” VSMPO-AVISMA Managing Director Dmitry Osipov said in an emailed statement on Monday. “We are now realigning our sales policy to other markets,” he said, adding that the company had been preparing for such an outcome for several months.

Western governments imposed sanctions on Russia after it invaded Ukraine in what it called a “special military operation,” but they have not targeted VSMPO-AVISMA, which is 25% owned by state defense conglomerate Rostec. It relies on aerospace for three-quarters of its sales. The potential disruption to Russia’s supply of raw materials has put the spotlight on titanium, which is also used in the shipping, auto and nuclear industries.

AIRBUS DELIVERIES In France, Airbus SE stated that it continues to source titanium from Russia and other countries. An emailed statement said it also sources titanium indirectly through its world-class suppliers, all while complying with sanctions.

The European planemaker said it relies on Russia for half of its total titanium needs, while VSMPO-AVISMA supplies a third of Boeing’s needs.

Industry sources say Airbus sources its Russian titanium primarily from VSMPO-AVISMA, with some titanium landing gear parts supplied by Nizhny Novgorod-based Hydromash.

It has said its overall ability to increase beam power depends on the availability of raw materials, including titanium. Its NH90 and Tiger military helicopter programs have relied on Russian titanium, according to Airbus’ 2019 annual report.

Airbus did not immediately respond to an inquiry about the specific status of its VSMPO-AVISMA contract.

Since the Crimean crisis in 2014, aerospace companies around the world have been increasing their reserves of titanium and diversifying their sources.

(Reporting by Kannaki Deka in Bengaluru, Pratima Desai and Tim Hepher; Editing by Shinjini Ganguli and Aurora Ellis) Boeing suspends Russian titanium while Airbus keeps buying

Caroline Bleakley

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