Supply pressures in China and South Africa, and no known stockpiles.
China has changed rebar standards so vanadium use will increase 30%.
Vanadium is key in the current ‘green revolution’ – 10% of current production earmarked for green technology.
Impending restricted supply and booming demand suggest significant further price rises.
We believe that the price increase is not only justified but increasing prices will continue due to increased demand and static supply.
- Majority of existing production comes from China, Russia, Brazil & South Africa.
- Primary vanadium production represents just 17% of annual production, with 71% as a byproduct of steel, and 12% from secondary sources.
- China just banned importation of scrap metal, which previously resulted in 4,500-5,500 tonnes per annum.
- China mine supply has already been curtailed by more environmental stringencies.
- Since 2014, 11,000 tonnes have been removed from market following closure of the Evraz Highveld Mapochs Mine in South Africa.
- In 2016, due to low iron ore prices, a slow down in iron ore production meant less vanadium production as a byproduct.
- China has limited its exports of vanadium by 70%.
- China comprises 42% of demand in 2017, Europe 19%, N.A. 10%.
- China will require an additional 17,000 tonnes per year of vanadium, which equates to 21% of global production.
- Meanwhile, Vanadium Redox Batteries are being adopted at breakneck speed in China to support clean, baseload power from renewable sources.
- Source: Core Consultants, Vanadium Market Review, Issue 01 April 2018.
New rebar standards will force China's vanadium metal consumption to increase 30% YoY for the next two years
US House of Representatives passed Amendment 122 to NDAA in June of 2018 to streamline permitting for critical metals.
Amendment 122 aims to accelerate permitting, licensing and work progress.
Long term security and value add for shareholders.