Boeing said on March 7 that it had suspended titanium purchases from Russia, while its main rival Airbus will continue to buy titanium from Russia, which is understood to be home to VSMPO-Avisma, the world's largest titanium supplier. Boeing says it has a large titanium inventory. Titanium is prized in the aerospace industry for its light weight, high strength and compatibility with the latest generation of carbon-fibre long-haul airliners. "We have suspended titanium purchases from Russia, and our titanium inventories and diversified sources provide an adequate supply for aircraft production," Boeing said in an email. The head of VSMPO-Avisma, which is controlled by Russian state-owned companies, slammed Boeing's decision to suspend the contract. Boeing renewed the contract four months ago at the Dubai Airshow, when it pledged to keep the Russian company as its largest titanium supplier. The two companies also agreed to increase usage at Ural Boeing Manufacturing, a forgings manufacturing joint venture in Russia's Ural Titanium Valley. Dmitry Osipov, CEO of VSMPO-Avisma, said in an emailed statement on Monday: "We deeply regret the suspension of our contract with our long-term partner. We are now adjusting our sales policy to other markets." It added that the company had been preparing for such an outcome for months. VSMPO-Avisma, which is understood to be 25 per cent owned by Russian state technology group Rostec, is not among the sanctions imposed by western countries against Russia. The company relies on aerospace for three-quarters of its sales. The potential disruption of Russian commodity supplies has put the spotlight on titanium, which is used in ships, cars and the nuclear industry as well as aviation. Cowen analyst Cai Von Rumohr said the availability of titanium does not pose a threat to Boeing's inventory in the near term, given the stock situation, and Boeing has been diversifying its supply sources since the Crimea incident in 2014. Von Rumohr has a "buy" rating on Boeing, but he lowered his price target to $230 from $265, citing near-term headwinds. Airbus: Business as usual In France, Airbus said it would continue to source titanium from Russia and other countries. The company said in an emailed statement that it also obtained titanium indirectly through tier 1 suppliers and that all measures were in compliance with sanctions. The European aircraft maker said it sourced half of its titanium supply from Russia, while VSMPO-Avisma provided about a third of Boeing's supply. Airbus imports titanium from Russia mainly from VSMPO-Avisma, while some titanium components for landing gear are supplied by Hydromash, a company based in Nizhny Novgorod, Lower Russia, industry sources said. The company has said its overall ability to ramp up jet production depends on the availability of raw materials such as titanium. According to Airbus's 2019 annual report, its NH90 and Tiger military helicopter programs rely on titanium supplies from Russia. Airbus did not immediately respond to media inquiries about the status of the VSMPO-Avisma contract.
