Russia’s invasion of Ukraine on Feb. 24 quickly prompted Western sanctions and a cascade of activity to safeguard assets, personnel and supply chains.
Titanium supply is a concern because about 40% of what is used in aerospace comes from Russia, says Kevin Michaels, AeroDynamic Advisory managing director. Several Western aerospace companies are looking for alternatives to contracts held with Russian titanium producer VSMPO-Avisma, which is a major supplier to Airbus, Boeing, Embraer, Rolls-Royce, Safran and others (AW&ST April 18-May 1, p. 50). In fact, several aerospace companies, including Textron Aerospace, stated in their first-quarter results that they plan to shift titanium sourcing away from Russia permanently.
While the aerospace community seems to have enough titanium for the near term, if OEMs ramp up production rates, that could change.
“Landing gear on twin-aisles are made of VSMPO titanium. While there are other sources we can find for titanium, the forging presses that make these landing gear struts need to be certified-—because right now they’re stamped out, and a lot of these parts are stamped out in Russia,” Michaels said at a geopolitical panel at Aviation Week’s recent MRO Americas’ conference. “This is a going to be a wild card to watch.”
While Russia’s war is inflicting pain—both on businesses and innocent civilians—the geopolitical repercussions are a big concern as well. Countries representing about half of the world’s populations support Ukraine, but the other half are taking neutral positions—including Brazil, China, India, Singapore and Thailand. Neutral stances can be taken to preserve independence or to avoid getting tangled up in what could become a new cold war, with China added to the mix.
Given that China’s aviation market is much larger than Russia’s, that its zero--tolerance lockdown COVID-19 policy can close major cities for weeks, and that it has moved to align more closely with Russia than the West, China is viewed as a bigger risk by many Western nations.
Ron Epstein, managing director of aerospace for BofA Global Research, also pointed out during an MRO Americas panel that the exemptions to “the Section 301 import tariffs that the Trump administration put in place” for the U.S. expire in mid-May. “Section 301 [of the Trade Act of 1974] put tariffs on about two-thirds of the goods that were imported from China into the U.S., and the exceptions back those off,” he explained. At the moment, it is not clear what the Biden administration’s changes might be. However, Epstein expects China to retaliate if the exceptions do not continue.
The bigger picture is that “we can’t look at China right now in isolation regarding what’s going on in Ukraine,” said Epstein. The level of China’s support for Russia during the war will have a big impact on how the geopolitics play out. This is something for suppliers to monitor.
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