Boeing And Airbus's Paths Diverge On Buying Titanium From Russia — Will The Supply Woes Worsen?

Boeing Co BA has suspended buying titanium from Russia since the country invaded Ukraine, The Wall Street Journal reported on Monday, citing a spokeswoman for the planemaker.

What Happened: Chicago-based Boeing told WSJ it had closed its engineering offices in Moscow and Kyiv and stopped sending spare plane parts to Russian airlines. 

The company sources about a third of its titanium from Russia, with the rest coming from the United States, Japan, China and Kazakhstan. The metal, known for its strength and lightness, is used in making commercial jets and military aircraft.

“Our inventory and diversity of titanium sources provide sufficient supply for airplane production, and we will continue to take the right steps to ensure long-term continuity,” the report quoted a Boeing spokeswoman as saying.

The planemaker has been scouting for additional titanium suppliers in case Russia retaliates to Western sanctions, according to the report.

Boeing has a 50-50 partnership in Russia with Rostec, a defense conglomerate whose subsidiary supplies titanium, According to WSJ. The planemaker did not reveal what it plans to do with the partnership.

See Also: Boeing Bleeding Orders To Airbus Due To Unrealistic Pricing, Says Ryanair CEO As Companies End Talks On Aircraft Purchase

What Rivals Are Doing: Airbus SE EADSY also secures a bulk of its titanium supplies from the Rostec subsidiary. The Paris-based company earlier said it is “protected in the short and medium-term.”

Airbus continues to source titanium from Russia, Reuters reported on Monday. The company said it obtains the titanium from Russia via first-tier suppliers, in compliance with the sanctions.

Brazilian planemaker Embraer S.A. is also a customer of the same supplier, but currently has a strong inventory, the report noted.

Emails sent to Boeing and Airbus seeking comment did not draw a response outside of business hours.

Price Action: Boeing stock closed 6.5% lower at $169.17 a share on Monday.

Photo by pjs2005 on Wikimedia