The escalating tension between the United States and Russia is impacting the titanium supply chain, with Japanese manufacturers positioning themselves as reliable sources of this crucial industrial metal.
In terms of volume, titanium weighs only 60% of steel but is twice as strong, with excellent high-temperature resistance and corrosion resistance. As a result, it is widely used in manufacturing rockets and spacecraft, as well as in applications such as prosthetics and materials for orthopedic implants.
In September of this year, Russian President Putin stated that they were considering restricting exports of strategic raw materials including uranium, titanium, and nickel in response to Western sanctions against Russia. This has heightened global concerns over the supply of titanium.
According to data from the United States Geological Survey (USGS), prior to the conflict in Ukraine, Russia accounted for 11% of the world’s production of sponge titanium (the first-stage raw material for producing titanium metal). Although this figure has since decreased, it remained at 6% in 2023.
Many companies are seeking to diversify their supply chains away from Russia to mitigate geopolitical risks. Following the outbreak of the conflict between Russia and Ukraine, Boeing has ceased procurement of titanium from Russia.
Nikkei Asia pointed out that this situation presents an opportunity for Japan. Japan is home to two companies producing sponge titanium, Toho Titanium and Osaka Titanium Technologies. Industry experts believe that these two companies are crucial for meeting the growing demands in the aviation sector.
According to USGS data, Japan’s production of sponge titanium increased by around 20% from 2021 (before the Russia-Ukraine conflict) to reach 60,000 tons by 2023. Last year, Japan’s production of sponge titanium accounted for 18% of global production, making it the second largest producer after China.
Osaka Titanium Technologies announced an investment of around 33 billion yen (approximately 2.18 billion USD) in September to expand its production capacity of sponge titanium. The company aims to increase annual production by 25% by the end of the fiscal year 2027, reaching 50,000 tons.
During a performance briefing on November 18, Toho Titanium stated that despite setbacks caused by the Boeing strike, titanium demand is expected to continue growing in the long term.
Trade data shows that the average export price of unprocessed titanium from Japan from January to September was 1,614 Japanese yen per kilogram, representing an increase of around 70% compared to 2021.
Professor Toru Okabe from the University of Tokyo told Nikkei Asia that he predicts Japanese titanium to be of high quality and easily supplied to Western countries, with demand expected to continue growing in the medium to long term.
Okabe also mentioned that if technological advancements lower the production cost of titanium, it could potentially replace stainless steel in applications where it is currently used.