Over the past three weeks, European spot ferrovanadium prices have jumped from about $28 per kilogram to $43, Jack Bedder of Roskill Information Services said via phone.

Meanwhile, vanadium pentoxide prices have risen from $5.75 per pound to $9.50 since mid-July.

That’s “probably the most exciting thing that’s happened to the vanadium price in some years,” he noted. Bedder, a commodities analyst at the firm, explained that tightness in the availability of Chinese feedstock helped raise domestic ferrovanadium prices to between $60 and $65; in turn, that helped boost prices in Europe and the US.  

Over 90 percent of ferrovanadium, an alloy of iron and vanadium, is used by the steel industry. Bedder noted that “there have been some shutdowns in China owing to environmental inspections, so that’s probably added a little bit to the tightness of the vanadium units. Probably just some general restocking as well.”

The Chinese government has forced some factories to suspend operations or close in an effort to reduce pollution, which has boosted prices for ferroalloy. According to Metal Bulletin, market participants are waiting to see if producers will be given permission to resume production in September.  

China was the world’s largest miner of vanadium in 2016, accounting for an estimated 44 percent of global production in 2016. As mentioned, the metal is most commonly used in steel, but analysts believe Chinese steelmakers will continue to reduce output as stocks at China’s ports are high. Yao Wei, chief China economist at Societe Generale (EPA:GLE) in Paris, told Bloomberg that a slump in housing sales growth is a main indicator of slowing domestic demand.

Bedder said there is “reasonably good demand for rebar,” and commented that China’s new governmentregulations on rebar quality standards are being implemented. “This rebar has to have a certain amount of vanadium in it, so positive news on the demand side,” he explained.

Traders estimate that global vanadium production was about 75,000 MT in 2016, but global consumption was about 80,000 MT. Vanadium feedstock supply peaked in 2013, though it has since declined. Output from China decreased between 2014 and 2015.

Continuing supply tightness

South Africa was the second-largest vanadium producer in the world until 2014. Evraz Highveld’s iron- and vanadium-producing Mapochs mine closed in 2015. Currently, Glencore (LON:GLEN) produces vanadium as a by-product and Largo Resources (TSX:LGO) is focused on vanadium extraction from its Maracas Menchen Mine in Brazil. 

Bushveld Minerals (LSze:BMN) is moving forward on its Mokopane Vanadium mining project and plans to build a vanadium electrolyte plant in South Africa, which would receive ore from its Vametco vanadium producing mine.

Other firms with exploration stage projects or that are involved in processing vanadium include: 

• Australian Vanadium (ASX:AVL) owns the exploration-stage Gabanintha vanadium project in Western Australia. The company said it has agreed to sell the rights for base metals at the project to Bryah Resources, but retains the rights to battery metals.
• Energy Fuels (TSX:EFR,NYSEMKT:UUUU) is primarily focused on uranium, but processes vanadium at its White Mesa Mill in the US.
• Intermin Resources (ASX:IRC) is primarily focused on gold, but does have one vanadium-molybdenum exploration-stage project in Queensland, Australia.
• Syrah Resources’ (ASX:SYR) main asset is the Mozambique-based Balama project. It primarily includesgraphite, but also has vanadium potential.
• TNG (ASX:TNG) is developing its Mount Peake vanadium-titanium-iron project in Australia’s Northern Territory.
• Vanadium One Energy (TSXV:VONE) has begun drilling at its Mont Sorcier vanadium-iron-titanium project in Quebec.
• VanadiumCorp Resource (TSXV:VRB) has an early stage project known as Lac Dore, and the company believes it can become a big-time North American supplier and major player in the vanadium industry.

Bedder on battery demand

Bedder said Vanadium Redox Batteries are another an emerging application for vanadium, and commented, “we envisage that over the next 10 years the battery market could represent maybe 7,000 tonnes of vanadium, but the upside is probably as high as 30,000 tonnes.

He added, “energy storage obviously is going to be a big thing, and it’s about which technologies we enact. I don’t think there’s going to be one winner. Vanadium redox [batteries] will probably have a share. Lithium-ion will as well.”

• [Editor:Wang Linyan]