The Economics of Vanadium, 11th edition, 2007

Spring 2005 saw vanadium prices rise to all-time record levels. Strong demand from the steel industry in 2004, especially in China and the USA, depletion of large vanadium pentoxide stockpiles and speculative activity, all pushed prices of vanadium pentoxide up to US$27/lb in March 2005, while those of ferrovanadium peaked at US$126/kg in April 2005. Prices at these elevated levels were unsustainable. Vanadium supply increased in 2005, while high prices led to some substitution of ferro-vanadium by ferro-niobium in special steels. The vanadium market remained broadly in balance during 2006, with world steel production continuing to rise, while there was little further substitution by ferro-niobium. World vanadium demand is estimated to have risen by over 8% in 2006, and supply by 12%, reducing the market deficit below 1,000t. Forecast growth in the vanadium market and high prices since 2004 have resulted in proposals for new projects, which could have a significant impact on world vanadium supply. As new capacity is brought on-stream, the vanadium market is forecast to move into surplus in 2008/09, and prices are expected to fall back to average historical levels of US$4.50/lb vanadium pentoxide and US$20-22/kg ferro-vanadium towards the end of the decade. This downward movement in prices is likely to limit the increase in vanadium supply.

The key trends, issues and developments in the market are analysed in this major new report from Roskill. It provides a clear insight into the industry and its trends, and an authoritative analysis of the prospects for the future.

What the report gives you

• Independent, in-depth research and analysis
• Essential market intelligence for successful business planning
• Detailed survey of production and processing in 36 countries
• Up-to-date profiles of the activities of over 80 vanadium producing companies and potential projects, including Highveld Steel and Vanadium, Xstrata, OAO Vanady Tula, Panzhihua New Steel and Vanadium and Precious Metals Australia
• Forecasts for end-use consumption and world supply and demand

Report highlights

Following modest average growth of around 1%py through the 1990s, world vanadium consumption has risen significantly since 2002, reflecting both higher world steel production and higher unit vanadium consumption as the share of high-strength steels in total steel output rises. Despite the set-back resulting from high prices in 2005, world demand for vanadium rose by 7.5%py from 79,800t V2O5 equivalent in 2003 to a peak level of 98,900t in 2006.

The outlook for vanadium consumption through 2010 appears optimistic. World consumption may show short-term fluctuations in line with steel production, but is forecast to show underlying growth of 5-6%py to reach 118,600t V2O5 equivalent in 2010. High-strength steels will continue to provide the main area of growth as increasing emphasis is placed on life-cycle costs in the construction industry, on reducing weight and improving fuel efficiency in the transport industry, and on the use of higher-performance materials to withstand aggressive environments in the oil and gas industry.

In Australia, Precious Metals Australia (Windimurra) will commission production of 6,000tpy ferro-vanadium by mid 2008. Aurox Resources (Balla Balla) has commissioned a bankable feasibility study that examines production of around 5,000tpy ferro-vanadium by 2010. In China, Panzhihua and Chengde Xinxin plan to raise capacity by some 8,000tpy ferro-vanadium and 6,000tpy vanadium pentoxide by 2011. In South Africa, the potential combined increase in capacity by Highveld Steel and Vanadium and Xstrata is over 6,500tpy vanadium pentoxide.

One change in structure of the vanadium industry in 2006/7 was the acquisition by Evraz Group of a 73% stake in Strategic Minerals of the USA, and of a 79% stake in Highveld Steel and Vanadium of South Africa. Following a competition enquiry by the EU commission, Evraz agreed to divest an equity interest in Highveld' s vanadium mining and processing operations, while retaining an interest in vanadium steel slag.