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Leading titanium producer cuts planned production 32% due to impact of COVID-19

Russian titanium producer VSMPO-AVISMA has cut its 2020 production plans by some 32% in response to the impact of the coronavirus pandemic on key end-use markets.

Vandadium-titanium

Citing the implications of a collapse in air travel on the need for new aircraft and repairs to the existing fleet, along with production shutdowns by its key customers, the company announced that it would reduce output of titanium products to 26.5kt this year from a previously planned 39kt.

Production of titanium sponge will also be reduced to 35kt. VSMPO-AVISMA had originally intended to produce 44kt of sponge in 2020.

Accounting for around half of all demand and necessitating the use of high-value, premium-grade titanium alloys, it is difficult to overstate the importance of the global aerospace market to the titanium metal industry, said metals, minerals and chemicals consultancy Roskill.

Years of steadily increasing air traffic and robust aircraft order books have supported a growing annual demand for aerospace-grade titanium but, due to the impact of the pandemic, air traffic is expected to be down by 48% this year with airline passenger revenues falling by 55% or US$314Bn, according to International Air Transport Association (IATA) estimates.

This is likely to be reflected in cancellations and deferrals of back-ordered aircraft and will compound the immediate disruption to demand caused by closures at various aerospace manufacturing facilities due to measures taken around the world to attempt to slow the spread of COVID-19.

VSMPO-AVISMA is the world’s largest titanium producer and supplies a major share of the titanium requirements of both Boeing and Airbus; the decision to scale-back production by up to a third gives some indication of the extent to which aerospace demand is expected to be disrupted by the pandemic in the near term, said Roskill. It is likely that other major producers along the aerospace-grade titanium metal supply chain will have already been considering their own production cuts.

Roskill’s new Titanium Metal: Outlook to 2030, 10th Edition report will be published in June 2020, including scenario assessments for the impact of COVID-19 on the titanium supply chain.

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