Vanadium

Properties

Vanadium (chemical symbol: V) is a soft, grey, ductile and tensile metal which is proving to be one of the most precious commodities in the world.  It has been used to strengthen and harden alloys such as steel and titanium, in petrochemical, catalyst, pollution control and ceramic applications and is increasingly being used in the advancement of battery technology.

Applications

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Data source: Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

Batteries

Vanadium redox batteries (VRB’s) are currently being developed and commercially deployed in industrial and grid storage applications.  Lithium vanadium phosphate battery systems are used in the automotive industry.

Batteries made with vanadium:

  • can meet the power demands of everything from a single home (kilowatt hour capacity) to a power grid (megawatt hour capacity);
  • have a lifespan of 20 years of more (tens of thousands of cycles);
  • can charge and discharge simultaneously;
  • do not produce profuse amounts of ambient heat while charging; and
  • can release massive amounts of electricity instantly – and repeatedly[1].

Although energy storage applications accounted for around 1% of vanadium consumed in 2012, these applications are expected to add significantly to demand for vanadium in the coming years.

Steel

The predominant use of vanadium is as a strengthening and hardening additive in steel and some forms of iron.  Only small amounts of vanadium are required to be added to steel to significantly enhance its hardness and strength (no more than 0.25% by weight to high-carbon steel or less than 5% by weight to steel intended for use in high-speed tools).  High strength low alloy (HSLA) steels typically contain less than 0.5% V.

TTP estimates that approximately 60% of global steel produced is C-Mn steel, about 20% HSLA steels and 20% special high alloy steels.  As a result, the market share of HSLA steel to total steel is expected to grow in the coming years due to the strong efficiency and economic and drivers which result from the replacement of C-Mn steel with HSLA steels.

The steel industry currently accounts for 92% of vanadium demand[2].  But with both China and Japan having mandated stronger rebar in construction, demand for vanadium in HSLA steels is expected to continue to increase.

Titanium alloys

Vanadium is also used in the production of titanium alloys for use in the aerospace industry and other applications where there are no other metallic substitutes.  Vanadium has the ability to allow titanium to perform better and at high temperatures.

Titanium alloys accounted for approximately 4% of vanadium demand in 2012 and according to international metals consultancy firm TTP, titanium alloy production is in a strong growth phase, with this application expected to make a contribution to growth in vanadium demand in the next 5 years[3].

Market outlook

Global steel production was reported as 1,490,060 MT in 2011[4] and TTP estimates global steel production to grow at a compound annual growth rate (CAGR) of 3.9% between 2011 and 2017.

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Data source: Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

Based on projected changes in global steel production levels and projected changes in global specific vanadium consumption rates within the steel industry, TTP’s forecasts growth in vanadium demand at 9.2% CAGR between 2011 and 2017.

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Data source: Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

Vanadium supply and demand

Total world vanadium consumption reached a record high of 78,000 tonnes in 2012.  China is the main producer of vanadium currently accounting for 58% of world supply with South Africa the second largest at 15%.

In 2006, China accounted for about 20% of world vanadium demand, rising to 34% by 2012.  This was mainly driven by increased steel production in China over that period.

Although China is a main world producer of vanadium, its new government regulations on rebar quality standards are expected to heavily impact the vanadium market.  The new construction design codes implemented in China are phasing out Grade 2 rebar (reinforcing bars) which have no vanadium, in favour of Grade 3 rebar which require about 0.35kg vanadium per tonne of steel.  An upgrade of rebar from Grade 2 to Grade 3 would require an additional 30,000 tonnes of vanadium per year.

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Data source: Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

Another potential large driver of vanadium demand is VRBs for grid storage application.  According to Lux Research, VRBs is forecast to account for 34% of the global large-scale storage battery market by 2017 which equates to US$38 billion in revenues.

TTP estimates that vanadium supply will grow by 8.7% and demand by 9.2% CAGR between 2011 and 2017[5].

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Data source: Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

TTP anticipates that market conditions will tighten between 2013 and 2017 as consumption of vanadium runs slightly ahead of production and given relatively low current global inventory levels.  TPP estimates that vanadium demand will rise to about 120,000 tonnes by 2017.


 

[1] The next big thing: Vanadium.  Cheryl Kaften/ pv magazine, 09/2012

[2] Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

[3] Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012

[4] World Steel Association http://www.worldsteel.org/statistics/crude-steel-production.html

[5] Vanadium Market Fundamentals and Implications.  Terry Perles/ TTP Squared, Inc., Nov. 13, 2012