How Boeing Accident Helps Russian Tycoons Get Out of Ban: Adding to Titanium Supply Chain: Airbus Seeks Help
芊芊551
发表于 2024-4-25 18:01:42
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Russia has always been one of the important sources of industrial metal raw materials in the world. However, due to the Russia-Ukraine conflict and the sanctions of western countries, some Russian metals, which constitute the industrial base, have been shunned by western manufacturers.
However, after the sanctions were truly implemented, the industry had to admit that simple decoupling was simply impossible to achieve. On Tuesday, European aircraft manufacturer Airbus announced that it had applied for exemption from Canadian authorities in response to Canada's sanctions against Russian metal company VSMPO-AVISMA.
Airbus stated that it has obtained the necessary authorization from the Canadian government to ensure that its operations comply with relevant sanctions regulations. Airbus did not disclose the duration of the exemption.
In February of this year, Canada imposed sanctions on VSMPO-AVISMA company on the grounds of its connection with the Russian military industry. Earlier, in September last year, the United States announced export restrictions on 28 international companies, including VSMPO-AVISMA.
Without Russian titanium, it's really not possible
VSMPO-AVISMA is the world's largest titanium producer and was once a major supplier to American aircraft giant Boeing. Its titanium parts are used in Boeing 737, 767, 787, 777 and other aircraft, accounting for one-third of Boeing's titanium supply.
Compared to Boeing, Airbus has a deeper dependence on VSMPO-AVISMA, with approximately 50% of its titanium coming from Russia. At least for now, Airbus is unable to find an alternative supply of Russian titanium, which is a fact that US and Canadian sanctions cannot change.
In December 2022, Michael Schoellhorn, CEO of Airbus Defense Aerospace, optimistically stated that it would only take a few months, rather than years, for Airbus to decouple from Russian titanium alloy.
Looking back now, it's quite embarrassing. Besides Boeing and Airbus, major aerospace component suppliers such as Safran Group and Rolls Royce are also struggling to escape the influence of Russian metals and still need to purchase titanium from VSMPO-AVISMA. This indicates that the West has always relied on key metals provided by Russia.
Even Western authorities are actually aware of this matter, so the European Union has cautiously avoided issues related to Russian titanium metals, while the United States only prohibits VSMPO-AVISMA from re exporting US produced titanium, rather than prohibiting imports of Russian titanium.
Only Canada and Ukraine have explicitly stipulated that domestic enterprises are not allowed to import Russian titanium metals. Unfortunately, within two months, Canada opened an exemption window for the ban.
Airbus in urgent need of titanium
As early as the early days of the Russia-Ukraine conflict, the market had expected that Russian titanium might be banned. Jefferies industry analyst Sheila Kahyaoglu has warned that VSMPO-AVISMA supplies nearly a quarter of the world's titanium, and a disruption would pose a threat to the global aerospace supply chain.
Toho Titanium in Japan and ATI Metals and RTI International Metals in the United States are widely regarded as alternative options for Russian titanium. In fact, Boeing announced in 2022 that it would stop purchasing Russian titanium, implying that it had found a suitable successor.
But the highlight of the entire story is that Boeing currently cannot produce a few planes, and its flagship 737 Max series aircraft are undergoing a long and difficult quality audit. After the Boeing hatch explosion in January, the Federal Aviation Administration of the United States required Boeing to produce only 38 737 series aircraft per month before ensuring compliance with quality and safety procedures.
In terms of data, Boeing only delivered 82 commercial aircraft in the first quarter of this year, a year-on-year decrease of 36%; Airbus delivered 142 commercial aircraft, an increase of 11% year-on-year.
A large amount of raw materials and components are piled up in Boeing's factory, making it difficult to start production. Other airlines want to expand their fleet and can only turn to Airbus to place orders, but this is a painful and joyful thing for Airbus.
Airbus, with limited production capacity, can only grit its teeth on the production line and make a big profit with tears in its eyes. But factories can operate in three shifts, but raw materials cannot appear out of thin air, which means Airbus can only continue to import titanium metal from Russia.
Difficulty in diversification
Another issue with titanium is that since aerospace has always been a highly customized industry, every component of Airbus aircraft may use different sizes and models, and sometimes it may also require titanium alloy suppliers to have the ability to directly produce titanium alloy components.
Boeing's titanium forgings are produced by a joint venture with VSMPO-AVISMA. Therefore, Airbus's desire to search for suppliers again in the midst of a large backlog of orders is tantamount to imagination.
Some people also point out that for aviation professionals, bypassing Russia in terms of supply will result in even higher costs. VSMPO-AVISMA has always been a leader in the aviation titanium industry, with highly competitive prices, making it difficult for buyers to diversify their purchases.
Some Western commentators also warn that, in terms of titanium, it is also one of the key raw materials for military aircraft and hypersonic weapon applications, and the West heavily relies on this metal. If Russia cuts off the flow of these materials, a large number of Western companies that are crucial to defense and civil aviation will instead face difficulties.
The US House of Representatives has previously discussed whether to allow Russian titanium to be used on military equipment, and the conclusion is that it is best not to. So several large companies, including Safran Group, have stated that they will not use Russian titanium alloy in military products, and the consequence is that the already limited "compliant" titanium supply will be further squeezed, and the civilian sector can only import a large amount of Russian metal.
Willy Shih, a professor specializing in manufacturing at Harvard Business School, has previously analyzed that the US titanium industry can certainly fill the gap left by Russia in the global market, but this requires significant investment and more efficient technology.
The problem is that far hydrolysis cannot quench near thirst, and the reconstruction of titanium production plants takes a long time, which cannot save short-term prices. Boeing's dramatic quality accident has entered a long waiting period for the world to get rid of Russian titanium.
Logomoney.com is an information publishing platform that only provides information storage space services.
Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
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