UKTMP Cites Boeing and Airbus Disruptions Amid Falling Sales, Looks for New Clients

The chlorine leak in May at JSC “Ust-Kamenogorsk Titanium and Magnesium Plant” occurred amid a decline in demand for the company’s products in Europe and the United States. Sales dropped by 8.7 percent last year, and company traders are unable to guarantee a return to previous levels by 2025. Official explanations concerning the crisis appear inconsistent with the available facts.

It is unclear how the lost revenue will be compensated.

UKTMP INTERNATIONAL LIMITED, the British subsidiary of JSC “Ust-Kamenogorsk Titanium and Magnesium Plant,” published its 2024 performance report. This entity markets the plant’s products in Europe and the U.S, thus providing a reliable indicator of Kazakh titanium’s competitiveness in high-margin markets.

In 2024, UKTMP’s sales amounted to $189 million — an 8.7 percent decline from 2023. According to the report, the main factor behind the drop was “disruptions at Boeing, where technical malfunctions affecting the production of the 737 MAX led to a shutdown of operations.”

As a result, Boeing experienced financial difficulties, revised its payment terms, and placed a significant portion of its employees on leave. Consequently, deliveries were suspended, and our shipments to Boeing decreased, the report states.

The report also notes that “Airbus also experienced disruptions in its supply chain, particularly from engine suppliers and other key partners, which negatively affected delivery volumes.”

Another key point in the report notes a projection that “sales volumes in 2025 will remain stable or slightly exceed 2024 figures."

As early as January this year, Boeing showed signs of rapid and substantial recovery, producing 45 new aircraft in a single month.

Meanwhile, Airbus managed only 25 deliveries. This rebound is supported by a significant order backlog of around $500 billion. In May, Boeing announced its readiness to increase 737 MAX production and resume deliveries to China by June.

Airbus executives also announced intentions to restore production volumes in 2025, with some categories expected to grow significantly. Notably, Airbus plans a 7 percent increase in commercial aircraft deliveries and will also ramp up production of A320 family narrow-body aircraft.

Therefore, a decline in overall demand for titanium products from U.S. and European aerospace corporations in 2025 seems unlikely. Nevertheless, UKTMP’s report does not mention any plans to restore deliveries to its two key clients to previous levels.

Instead, the report mentions the trader’s intent to secure several new long-term contracts that “will ensure sales through the end of the decade.”

No information is provided regarding the potential partners.

The report could also reflect technical challenges at the production facilities of JSC “Ust-Kamenogorsk Titanium and Magnesium Plant.”

On May 19, the plant experienced a release of caustic gas. Hundreds of videos surfaced on social media showing yellow smoke engulfing residential areas of Oskemen, with residents reporting throat and eye irritation. Local authorities, emergency services, environmental, and epidemiological agencies were dispatched to the scene.

Some measurements confirmed that chlorine levels exceeded permissible limits.

According to the company, an unscheduled preventive cleaning of the chlorination unit No. 3’s condensation system was underway. During it, the lining material collapsed, leading to a blockage of the gas duct.

An inspection initiated by Kazakhstan’s Minister of Ecology, Yerlan Nyssanbayev, confirmed the release of vapor-gas mixtures bypassing the existing gas purification system. Additionally, sampling equipment was found to be non-compliant with current regulations.

These findings indicate violations in environmental monitoring and the reliability of reported ecological data. Still, the company was fined only 24 million tenge (approximately $45,000), an insignificant amount for such an industrial operation.

The greatest concern remains not environmental, but technological. Experts caution that the emergency shutdown of the titanium chlorinator could rupture the entire production chain. The severity of the issue depends on the number and capacity of chlorinators in use.

In the best-case scenario, a decline in output and missed production targets can be expected; in the worst, a complete shutdown of the plant and a temporary halt in the production of commercial goods.

A forced halt in UKTMP’s production lines would reduce supply on the global market, potentially driving up prices for titanium sponge and ingots by at least 15–20 percent in the near future.

However, this price spike is expected to be temporary, offset by supplies from Russia, where the non-sanctioned titanium producer, Solikamsk Magnesium Plant, continues to operate.