The titanium tsar
On March 7, 2022, at 8:13 a.m., a phone rang in a top-floor conference room at Boeing’s headquarters in Arlington, Virginia.
On the other end of the line, a senior executive at VSMPO-AVISMA — the world’s largest titanium producer, based in Verkhnyaya Salda, 1,800 kilometers east of Moscow — had just learned from a press release that Boeing was suspending all purchases of Russian titanium.
Four months earlier, at the Dubai Airshow in November 2021, the two companies had signed a memorandum of understanding with great ceremony, confirming that VSMPO would remain Boeing’s principal titanium supplier across the entire commercial portfolio — the 737 MAX, the 767, the 777, the 787 Dreamliner.
The Russian executive did not understand.
He was calling for an explanation.
No one at Boeing picked up.
That phone call, and the silence that answered it, marked the end of an industrial dependency that had endured since the collapse of the Soviet Union.
And it marked the beginning of a story that, three years later, the equity markets have still not properly absorbed.
This is a story about a strategic metal. It is the story of a 54,000-ton forging press in the Ural mountains that has forged the landing gear struts of nearly every Boeing 787 and 777 ever built.
It is the story of a twenty-five-year industrial marriage between Boeing and Vladimir Putin.
And it is the story of an investment window which, in May 2026, is in the final stages of closing.
This letter is about that window…
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The metal you cannot replace
Titanium is not a raw material like any other.
It weighs 45% less than steel at equivalent strength. It resists corrosion like no other industrial metal.
It retains its mechanical properties up to 350°C, well past the point where aluminum begins to soften. And — the decisive property for modern aerospace — it is one of the very few metals with a thermal expansion coefficient compatible with carbon fiber composite.
That last property explains why titanium is not merely used in modern aerospace. It is embedded in it.
A few numbers to fix the orders of magnitude.
A Boeing 787 Dreamliner contains roughly 19 tonnes of titanium, or 15% of its structural weight. An Airbus A350 XWB contains a similar amount, about 14% of its weight, concentrated in the landing gear, pylons, attachments, and door surrounds. A Boeing 777 contains 50 tonnes. And the numbers explode in defense.
A Lockheed Martin F-22 Raptor — the most capable air superiority fighter ever built — is 41% titanium by weight. More than four tonnes per airframe.
The F-35 Lightning II contains nearly a tonne per aircraft across its three variants.
The SR-71 Blackbird, the legendary Cold War reconnaissance aircraft, was 93% titanium — it was, quite literally, a flying titanium machine.
None of these aircraft would exist without this metal.
There is no substitute.
There is no “Version 2.0 without titanium” in development.
Titanium is, for modern aerospace and defense, what silicon is to semiconductors.
And for twenty-five years, the West bought it from one man.
Verkhnyaya Salda
Verkhnyaya Salda is a forgotten city in the Urals. 43,000 inhabitants.
Five months of winter. A chromite mine nearby. And a factory, founded in 1933 by decree of Stalin, which today produces more aerospace-grade titanium than any other site in the world.
VSMPO-AVISMA employs 22,000 people. It owns the largest titanium forging press ever built, a 75,000-ton machine operated through a joint venture with Alcoa in Samara. It is 25% owned by Rostec, the Russian defense conglomerate run for years by Sergei Chemezov, a former KGB officer who served in East Germany alongside Vladimir Putin.
Before the war, Boeing depended on VSMPO for roughly 80% of its titanium needs. Airbus for roughly 60%.
Embraer for nearly 100%. Russia’s grip on the global aerospace titanium market was not a market share — it was a de facto monopoly.
That grip was not built by accident. In the 1990s, in the chaos of post-Soviet Russia, Boeing made a decision that seemed brilliant at the time and looks today like one of the most consequential strategic errors in modern American industry.
Rather than supporting domestic producers — Allegheny Technologies in Pittsburgh, TIMET in Dallas, Howmet in Pittsburgh — Boeing chose to offshore its titanium supply chain to Russia.
The economics were impeccable. Russia had the metallurgical engineers trained by the Soviet nuclear industry. It had the giant forging presses inherited from the MiG program. It had the ore. And it sold cheaper.
In 2000, Boeing and VSMPO formed a joint venture. In 2009 they opened Ural Boeing Manufacturing, a shared facility on the VSMPO site, specializing in the near-net-shape machining of titanium forgings for the 737 MAX, the 787, and the 777X. In 2018 they opened a second facility in the “Titanium Valley,” a special economic zone created by the Russian government specifically for them.
At the peak of the cooperation, Boeing had offshored to a single Russian site the entire critical-titanium supply chain for its commercial airliners — landing gear for the 787, wing spars for the 777, structural fittings for the 737 MAX.
The joint venture operated a 54,000-ton forging press producing the main landing-gear struts for the 787 and 777. If that press were cut off by Western sanctions, or by Russian retaliation, there were only one or two facilities in the world with comparable capacity — and qualifying a new site would take years under strict regulatory oversight.
European Airbus did not even bother with a joint venture. It simply bought. In its 2019 annual report, Airbus explicitly acknowledged that the production capacity of the A350 — its flagship aircraft — depended on Russian titanium supply.
On February 24, 2022, Russian tanks crossed the Ukrainian border.
The first shock
In the seventy-two hours following the invasion, phones exploded in the procurement departments of Boeing, Airbus, Safran, Rolls-Royce, Embraer, and their hundreds of subcontractors. The question was the same everywhere: how much stock do we have?
The answer, for most, was uncomfortable. Six months. Sometimes nine. Rarely more than twelve.
On March 7, 2022, Boeing publicly announced the suspension of all purchases from VSMPO. Airbus, more dependent and more pragmatic, stayed silent for several weeks before reluctantly confirming that it would continue to source from Russia — arguing, accurately, that Western sanctions did not yet explicitly include titanium.
Six months later, on September 7, 2022, a Lockheed Martin press release landed in trade publications across Washington. The Pentagon had just temporarily halted all F-35 deliveries. Not because of a technical defect. Not because of a supplier delay. Because of an alloy.
A magnet in the F-35’s Honeywell-made turbomachine had been found to contain a cobalt-samarium alloy whose raw materials originated in China. An investigation walked the chain backward: Honeywell had bought the component from a subcontractor, who had bought it from a sub-subcontractor, who had bought the alloy from a Chinese supplier.
As William LaPlante, undersecretary of defense for acquisition, put it at the time: one CEO had told him recently that he thought he had 300 suppliers and discovered, when he counted all of them, that he probably had 3,000. Suppliers can change overnight.
The Pentagon concluded there was no security risk — the magnet transmitted no sensitive information. A waiver was signed. F-35 deliveries resumed in November 2022, with Honeywell promising to find an American supplier for future aircraft.
This was the second time in seven years that the Pentagon had been forced to sign a waiver to its own Specialty Metals Amendment — the U.S. law that explicitly prohibits the use of specialty metals produced in China, Iran, North Korea, or Russia in defense equipment.
The first waiver, in 2015, had allowed the F-35 to use Chinese rare-earth magnets. The second waiver, in 2022, had allowed a Chinese alloy in the turbomachine. And no one, in Washington, seemed to grasp at that moment that these two waivers were the superficial symptoms of a much deeper structural problem.
The country that presents itself as the world’s leading military power no longer controls the supply chain of the critical metals in its own weapons.
Two years of denial
Between March 2022 and September 2023, something happened that deserves a clear name: denial.
Boeing had officially stopped buying from VSMPO. On paper. In reality, investigations have since shown that Russian titanium continued to enter Western supply chains through indirect channels — intermediary subcontractors, transit through third countries, purchases by Tier-3 suppliers that Tier-1 customers preferred not to monitor too closely. Airbus, more transparent, admitted in 2024 that it continued to source partially from Russia through European subsidiaries.
Rolls-Royce publicly declared it had ceased all Russian purchases. The Washington Post demonstrated in 2025 that this was false.
Formal sanctions came only gradually. In September 2023, the U.S. Department of Commerce finally added VSMPO-AVISMA to its export control list — but the listing did not ban purchases, it simply required case-by-case licenses. Russian trade records show that in 2022, VSMPO exported approximately 15,000 metric tons of titanium, valued at $370 million, largely to Western countries. By 2023, even with reduced reporting transparency, VSMPO still shipped at least $345 million worth of titanium abroad. The principal destinations were France, Germany, the United States, and the United Kingdom.
Meanwhile, the price of aerospace titanium kept climbing. By industry estimates, titanium prices have risen approximately 160% since the beginning of the war in Ukraine. Lead times at Western suppliers stretched from 9 to 18, then to 24 months. Boeing acknowledged in half-statements that it had bottlenecks on the 787. Airbus admitted A350 production capacity was constrained by titanium supply.
On May 24, 2024, the Kremlin sent a signal that should have shaken the boardrooms of half the global aerospace industry. Vladimir Putin, in response to Western sanctions on Russian nickel, announced that he was considering a ban on Russian exports of titanium and nickel.
The announcement remained a threat. But it changed something. For the first time in twenty-five years, the West understood that the dependency it had accepted in the 1990s for reasons of economic convenience had become a dependency that one man in Moscow could weaponize at will.
And that is where the second lesson arrives — the more important one.
The rare earth playbook
There is a ghost in this story. An industrial precedent that Pentagon officials know by heart, that they cite behind closed doors, and that today determines their response to the titanium problem.
That precedent is rare earths.
In 1992, Deng Xiaoping pronounced a phrase that became famous: “The Middle East has oil. China has rare earths.” Over the following thirty years, China methodically built the most concentrated industrial monopoly in modern history — 90% of global refining, 95% of permanent magnet production. In 2010, in a dispute with Japan over the Senkaku Islands, China demonstrated that it could turn off the tap in forty-eight hours. The West took notes. And did almost nothing.
Fifteen years later, in April 2025, China transformed its rare earth dominance into a formal geopolitical weapon, instituting a case-by-case export licensing regime. Volkswagen halted assembly lines. Ford quietly slipped delivery dates.
The Pentagon invested $400 million in preferred equity in MP Materials, the only fully integrated Western rare earth producer, becoming its largest shareholder and guaranteeing a price floor for ten years.
The pattern, condensed:
The West offshores a strategic industry for economic reasons.
Twenty to thirty years pass. The dependency becomes structural.
A geopolitical event reveals the vulnerability. The West takes five to ten years to understand that this is a national security problem, not a market problem. When it finally understands, it spends staggering sums to rebuild what it dismantled — and the rare Western companies that survived in the meantime see their valuations rerated.
MP Materials went up roughly 10x between 2020 and 2025. ATI doubled in the last twelve months alone. The investors who understood the rare earth pattern in 2017 — when Mountain Pass was purchased for $20.5 million on Delaware courthouse steps — multiplied their stake fifty-fold over eight years.
Titanium is approximately where rare earths were in 2017.
The Pentagon has already begun writing checks. In February 2025, it obligated $47.1 million to one young American titanium producer through the Department of War’s IBAS program. In July 2025, it signed with the same company a Phase III SBIR IDIQ contract worth up to $99 million for titanium parts intended for U.S. Army ground vehicles. In September 2025, it gifted that company 290 metric tons of titanium scrap from strategic stockpiles — the equivalent of roughly 18 months of feedstock at current operating capacity.
Apple has not yet signed. But Apple now uses titanium across its product line — the iPhone Pro switched to a titanium chassis in 2023, and Apple’s industrial titanium consumption is now comparable to that of a mid-sized aerospace OEM. Long-term supply contracts are coming.
The U.S. Export-Import Bank has approved an $11 million loan for advanced manufacturing equipment. Halifax County, Virginia, has structured tax-exempt bond financing to underwrite the company’s industrial expansion.
The Pentagon has positioned this company as the cornerstone of its titanium reshoring strategy.
That company has, as of this writing, a market capitalization below $1.2 billion. For comparison: MP Materials, at a similar stage of federal support, is now worth roughly $11 billion.
The multiple is not a guarantee. But the industrial grammar is identical.
What the market has not yet priced
Three facts are converging in May 2026, and the equity market has, in our view, priced none of them correctly.
First fact. The European Union is preparing its next sanctions package against Russia, and multiple diplomatic signals suggest that titanium may finally be included. France, long reluctant because Airbus and Aubert & Duval depended on VSMPO, has shifted position over the past year after securing alternative sources. If titanium is included in the next package, Airbus will be forced to substitute in quarters what it has been substituting in years. Pressure on Western capacity will be at maximum.
Second fact. The combined backlog of Boeing and Airbus today exceeds 14,000 aircraft, roughly eight years of production at peak capacity. None of those aircraft can be delivered without structural titanium. And the pre-COVID peak of global commercial aircraft production — about 1,600 aircraft per year — has still not been reached in 2026. Both airframers are accelerating simultaneously. Global aerospace titanium demand will, mechanically, roughly double over the next five years.
Third fact. The F-47, the successor to the F-22 developed under the Next Generation Air Dominance program, is now moving toward production. The B-21 Raider stealth bomber is ramping. The new Virginia-class submarines, the Arleigh Burke Flight III destroyers, and the hypersonic munitions programs — all consume defense-grade qualified titanium, the high-margin segment where Western producers earn 25 to 35% gross margins.
Sum the Pentagon’s announced procurement. Sum civil aerospace capex. Sum the European sanctions trajectory. Sum the parallel reinvestments in Japan (Toho Titanium, Osaka Titanium), Australia (Iluka Resources), and Saudi Arabia. You arrive at a multi-decade capex cycle worth tens of billions of dollars, concentrated on a small number of Western companies capable of producing qualified aerospace-grade titanium.
Three or four listed names. Not many more.
The window
If you have read this far, you understand the mechanics.
You understand why a metal almost no one mentioned in financial newspapers five years ago has become, in 2026, one of the most structural bottlenecks in Western industry. You understand why the Pentagon is writing checks. You understand why the grammar is exactly the one that took MP Materials from $1.5 billion to $11 billion in five years.
What you do not have — not yet — is the operating framework.
Which company, specifically, is standing on the metaphorical courthouse steps today? At what entry point, with what position size, what stops, what dated catalysts? Which three names have we built into a basket — one already-established large cap for stability, one mid cap for convexity, one small cap for the multibagger asymmetry? What is the bear case — the scenario where the war ends in 2026, sanctions are lifted, and VSMPO returns to the market? How do we hedge that scenario?
Which European producers will mechanically benefit if the next sanctions package includes titanium? At what valuations are they trading today relative to their American comparables?
Which American pure-play — current market cap below $1.2 billion, backed by nearly $160 million in federal commitments, proprietary technology for direct titanium production from scrap — presents, in our view, the best multibagger asymmetry of the complex? At what price did we accumulate, at what price do we continue to add, and at what level do we begin to trim?
These are the questions the second half of this letter answers.
Our conviction: the titanium thesis will rerate on a sequence of catalysts between mid-2026 and Q1 2027 — possible EU sanctions inclusion, the announcement of long-term commercial supply contracts with major OEMs, and the mid-2027 commissioning of new American production capacity. When those catalysts have fired, the thesis will be on the cover of the Wall Street Journal. By then, the rerate will already have happened.
You do not need the consensus’s permission to position around a thesis that the Department of War has already validated with $47 million in obligated funds, $99 million in framework contracts, and 290 tonnes of titanium gifted outright.
Macro Notes Premium
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The exact ticker of the multibagger pure-play, its current accumulation range, and our target allocation.
The European names positioned to benefit if titanium enters the next EU sanctions package. A precise catalyst calendar from mid-2026 through Q1 2027.
Three valuation scenarios (bear, base, bull) with per-share price targets.
The short basket we use to neutralize aerospace sector beta.
The asymmetric option structure we believe is currently best-priced on this theme.
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