I last wrote about vanadium in May 2017, you can read that post here. The vanadium pentoxide price (98% flake) was then little more than USD6/lb. Today it is USD33.90/lb in China (USD26.65/lb in Europe). The main driver for the increase is China’s new rebar (concrete reinforcing bar) standards that came into effect 1 November 2018.

Depending upon the rebar grade, vanadium content in the steel will increase about threefold to 0.03% to 0.1%. While this may not seem much; in 2015 the world produced 273Mt of rebar, China’s share was 204Mt. At an average vanadium content of 0.06%, this would amount to annual consumption of 160,000t of vanadium. In 2016 world vanadium production amounted to 79,000t, over half produced by China.

A forthcoming shortfall looks inevitable, depending upon above ground stocks. However, over the longer term, there is no shortage of vanadium. According to the USGS (UD Geological Survey) world resources of vanadium exceed 63 million tons. But considerable time is required to develop further supplies so price tightness could be around for a while.

It is worth considering the case of lithium, where world resources are gigantic, but adding supply takes time. Lithium supply has been steadily increasing over the past couple of tears, and the price has halved during 2018. Expect the same for vanadium, but a few years out.

06 November 2018 Commodities