OSAKA Titanium technologies Co.,Ltd.

Business Details

The segment manufactures and sells Titanium Sponge and Titanium Ingot as its main products. Exports for aircraft applications account for the majority of sales, with Sumisho Metalex and Shinko Shoji as major sales destinations. While MRO demand has remained solid against the backdrop of a global recovery in commercial aircraft demand, inventory adjustments in the supply chain centered on commercial aircraft manufacturers and sluggish domestic demand for general industrial applications have weighed on earnings. Note that from the 29th fiscal year, Titanium Tetrachloride / Titanium Tetrachloride Aqueous Solution has been transferred to the High-Performance Materials Business segment.

Recent Overview

Operating income declined sharply by 48.1% year on year due to inventory adjustments and sluggish domestic demand

In the 29th fiscal year (FY2026, ending March 2026), Titanium Business net sales were ¥40,444 million (down 10.6% year on year), and operating income was ¥4,654 million (down 48.1% year on year). Export sales remained nearly flat (up 1.5% year on year) as MRO demand stayed solid, while domestic sales fell sharply by 42.8% year on year due to sluggish demand and ongoing inventory adjustments among customers and end users. Declining sales prices under the export price formula also weighed on profit. For the following fiscal year (FY2027, ending March 2027), the Company expects continued supply chain inventory adjustments and a temporary decline in export prices due to falling titanium ore index prices, and forecasts Titanium Business net sales of ¥41,000 million and operating income of ¥2,400 million (down 48.4% year on year).

Key Products

Growth Drivers

• Solid underlying trend in engine MRO demand driven by an increasing number of commercial aircraft in operation
• Medium- to long-term expansion of Titanium Sponge demand against the backdrop of growing order backlogs at Boeing and Airbus
• Expansion of supply capacity through the Titanium Sponge capacity increase at the Amagasaki Plant (scheduled for completion by the end of FY2027, ending March 2028)
• Demand for stable supply of high-quality Titanium Sponge accompanying capacity expansion by U.S. titanium wrought material manufacturers
• Capturing substitute demand arising from the realignment of the global titanium supply chain triggered by the situation in Ukraine
• Improvement in export profitability from yen depreciation effects (FY2027, ending March 2027 forecast assumes an exchange rate of US$1 = ¥150)

Risks

• Continuation of supply chain inventory adjustments centered on commercial aircraft manufacturers into the following fiscal year
• Temporary decline in export sales prices due to falling titanium ore index prices applied under the price formula
• Continued sluggish demand for domestic general industrial applications (electrolysis plants, plate-type heat exchangers, etc.)
• Declining trend in general industrial Titanium Sponge demand associated with the slowdown in the Chinese economy
• Risk of fluctuations in prices of raw materials such as titanium ore and energy
• Heightened uncertainty in the business environment due to U.S. additional tariffs and retaliatory tariffs from various countries
• Risk of sales concentration in Sumisho Metalex and Shinko Shoji as customers