Higher construction standards will lead to further growth in demand for vanadium
Prices for ferrovanadium likely to exceed US$50 before 2015, but will not return to highs experienced in 2005
Vanadium prices have shown a high degree of volatility over the last 20 years. However, in the economic downturn in 2009, the price did not fall to the lows experienced between 1998 and 2003. In a prompt response to economic conditions, many producers cut output and limited the fall in price. The recovery in prices for ferrovanadium stalled in mid 2010, but in the longer term prices for ferrovanadium are forecast to rise to above US$50/kg.
Increasing role of China – both in supply and demand
Over the last decade, China has become both the main producer and consumer of vanadium. In terms of supply, it now accounts for almost 50% of the global total and planned expansion over the next two years will consolidate this position. Chinese demand for vanadium grew at 13%pa between 2003 and 2009 in line with its burgeoning steel output. Countries with mature economies have a much higher intensity of use of vanadium in steels than industrialising countries; in 2008, intensity of use in the USA was more than three times as great as that in China. Over the next decade one of the main drivers for growth in vanadium demand will be a combination of strong growth in steel output in BRIC countries and an increasing emphasis in these countries on production of high strength low alloy steels with their higher vanadium content. Both China and Japan are raising standards for the strength of rebar steel, which will provide a further driver for growth in demand.
Potential for further growth in production capacity
World production of vanadium grew by more than 7%pa from 2003 to 2008. Initially, production increases were met by taking up spare capacity at existing operations but from 2006, capacity had to be increased to meet demand. Most of this expansion, however, was also at existing mines and plants, most notably in China. In the next few years additional supply will come from further expansion in China, but also from re-opening the mine and plant at Windimurra, a new mine and plant in Brazil, further expansion of slag output in Sichuan as well as an increase in by-product output from uranium processing in the USA and South Africa.
About 80% of vanadium is derived from mined ore, either directly as mineral concentrates derived from vanadiferous titanomagnetite (VTM) or indirectly from steelmaking slags, where the steel has been produced from VTM. The difficulties associated with processing VTM for steelmaking has effectively limited its use to the existing few steel plants in China, South Africa and Russia. All of the new sources of vanadium (as opposed to expansion at existing operations) are expected to come from direct exploitation of mineral concentrate or from secondary sources.
Over 90% of vanadium used in steel
Vanadium is added to steel, principally high strength, low alloy steels in the form of ferrovanadium or vanadium-nitrogen proprietary alloys to increase strength. At times of high vanadium prices or perceived tightness of supply, vanadium is susceptible to some degree of substitution by niobium. The use of niobium in flat products is now well established but vanadium is the alloy addition of choice for rebar. Demand for high-strength steels in construction is growing in line with an increased emphasis on life-cycle costs in the construction industry and a growing awareness, in those countries prone to earthquakes, that higher construction standards are required to prevent mass destruction of buildings, such as occurred in Sichuan province in 2008.
Vanadium is also used in the masteralloys added to titanium, a sector largely driven by the demand for titanium alloys in commercial, business and military aircraft. In the short-term, the main area of growth for vanadium in chemical applications is in catalysts for desulphurisation, sulphuric acid and maleic anhydride production. In the longer-term, vanadium consumption could be stimulated by the further commercialisation of vanadium redox flow batteries.
Vanadium: Global industry markets & outlook (12th edition, 2010) is available from Roskill Information Services Ltd, www.roskill.com/vanadium
Note to editors
The report contains 203 pages, 104 tables and 56 figures. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.
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