China’s vertically integrated titanium supply chain, its limitations

China has built end-to-end, near self-sufficiency, in the titanium supply chain, controlling every step from raw minerals to high-end products, but faces critical barriers to aerospace qualification and domestically-constrained mineral resources.

Over the past 20 years, Chinese companies have expanded aggressively into mining heavy mineral sands (ilmenite) and hard-rock titanium deposits, then integrating upstream into pigment factories, sponge plants, and even finished alloy component manufacturing.

This vertical integration means China can mine titanium and internally upgrade it through each stage: concentrate → TiO₂ pigment (for paints, plastics) → titanium sponge → melted alloys and mill products for aerospace and industry.

To illustrate China’s scale:

• Nearly 90% of all mined titanium ends up as TiO2 pigment, and China has become the largest producer and consumer of these pigment feedstocks by far
• as of 2024, China’s titanium sponge capacity was 260,000 tonnes – about 63% of global capacity. This dwarfs the capacity of Japan (15%) or Russia (11%)

China’s feedstock dominance is backed by both domestic mines (eg in Sichuan, Hebei, Hainan provinces) and strategic offtake agreements abroad. Chinese firms have been investing in African mineral sands projects, and the state-owned China National Nuclear Corporation (CNNC) secured stakes in ilmenite mines to guarantee ore supply.

China’s integration is equally comprehensive in titanium metal. Chinese companies operate multiple sponge plants (titanium sponge is the porous metal from Kroll/Hunter processes), which feed into domestic melting facilities that produce ingots, billets, and finished titanium parts.

In short, China’s vertical integration has transformed titanium from a once somewhat dispersed global supply chain into one increasingly centered on China.

Cost advantages: why China produces titanium cheaper

China’s titanium industry operates at a structural cost advantage driven by cheap inputs, scale, and lighter regulation, including:

• labor and compliance: industrial wages are 70-80% lower  than in the West. Environmental controls cost have been lower across than EU/US levels (the sulfate-process pigment creates large amounts of acidic waste and iron sulfate byproduct)
• cheap chemical and energy input: costs of chlorine  and sulphuric acid are significantly cheaper in China; electricity is also cheaper and state-subsidized
• scale economies: mass production in China yields economy of scale benefits in procurement and operations while, for example, Japan’s relatively smaller-scale plants struggle to compete.

Critical constraint: aerospace qualification and feedstock limitations

However, there is a critical caveat often overlooked: most Chinese titanium sponge and mill products are NOT qualified for Western aerospace and defense applications. This is not accidental — it reflects deliberate quality standards, ITAR restrictions, and technical certifications that Western aerospace manufacturers require.

In aerospace and defense, only high-quality sponge from qualified sources can be used; impurity levels and consistency are critical. Most titanium sponge exports from China do not meet stringent Western aerospace specifications and are either unavailable for export. 

Thus, the 67% share in global sponge production does not translate into dominance in aerospace-grade sponge — a critical distinction.

This certification and qualification bottleneck means that even though China has sponge capacity to spare, Western aerospace manufacturers cannot easily use it. The West must therefore continue to rely on qualified suppliers, primarily Japan’s producers (Toho Titanium and Osaka Titanium) and, where possible, non-sanctioned CIS ((Russia, Kazakhstan, Ukraine) suppliers.