US Titanium Firms Angry at Senate Deal; Russian Firms Angry at US FirmsAug 11, 2006 05:41 UTC by Defense Industry Daily staff
Controversies have kept going on regarding the USA’s 1973 Berry Amendment, which mandates US firms as sources for ‘strategic metals’ used in the defense industry. Aerospace companies want it relaxed to introduce more competition for a metal they’re using more often, and appear to have agreement in principle from the Pentagon. US titanium producers like Allegheny Technologies, RTI International and TIMET are fighting to keep it as is to protect their turf.
The US Senate thinks it has a compromise that allows suppliers to skip reporting on small items like bolts, etc. US titanium producers are fighting even that measure. Which now has the Russians involved.
In the wake of recent State Department sanctions on Russia’s umbrella weapons exporter Rosoboronexport and fighter-maker Sukhoi, and vocal lobbying by US titanium firms against the Senate compromise, the world’s #1 titanium firm VSMPO-Avisma is voicing concerns that US titanium companies are trying to fence it out of the American market altogether, where it reportedly owns a 20-35% share via civil sales.
Russia remains the globe’s leading exporter of titanium, and VSMPO-Avisma is going public with fears that these measures may be followed by an anti-dumping probe against it. What is likely to be of greater concern is the fact that Russia’s military export agency Rosoboronexport plans to acquire the world’s biggest titanium maker, in line with its overall commercial/ political strategy. Rosoboronexport is chaired by Sergei Chemezov, an ex-KGB officer and friend of Valdimir Putin’s.
The thing is, Rosboronexport has just landed on US sanctions lists for its activities related to Iran.
The issue will be tested early, as Boeing may be about to unveil a 50/50 Russian joint venture with VSMPO to create titanium parts for its 787 Dreamliner passenger jet. The Financial Times reports that Boeing plans to buy $4 billion in parts from the joint venture over the next 10 years; by 2030, says the article, Boeing plans to spend up to $18 billion on Russian titanium products and $5 billion on Russian engineering services. See DID’s overall analysis of the sanctions issue for more.
What is certain is that the titanium issue appears to be adding one more source of strain to overall US-Russian relations, at a difficult time. Follow our article describing the sanctions issue with Rosoboronexport & Sukhoi, as well as DID’s earlier stories for more background regarding the American Berry Amendment specifically. Then read Kommersant’s August 9th article “Another Russian Exporter Forced Out of the U.S. Market” for the Russian viewpoint.
- US DoD Advanced Materials and Processes Technology Information Analysis Center (Vol. 6, #2) – Lowering the Cost of Titanium [within this PDF file].