Vanadium is a hard, ductile, silver-grey metal that is mainly used in alloying with steel to increase strength. Over 90% of all the vanadium produced is used as an alloying agent for steel. Other uses of high purity vanadium include in aerospace, some chemical catalysts and in vanadium redox batteries. Vanadium can be recovered in three ways, as a primary product (18% of 2018 global supply), as a co-product from steel production (70% of 2018 global supply), or as a secondary product, for example from alumina slag and fly ash (12% of 2018 global supply). China is the world’s leading producer of vanadium (57% of 2018 global output), although the majority of this comes from co-production. Currently vanadium is only recovered as the primary product from three mines worldwide – two in South Africa and one in Brazil. Other mines have closed in recent years, adding to the restricted supply.
finnCap Ironveld Company Note (16 July 2019).
The vanadium market displays supportive fundamentals as demand has increased substantially, despite supply remaining relatively flat. Enhanced regulation and legislative change in China has continued to drive demand and is expected to do so in 2019. The demand for vanadium in the steel market is predicted to grow at approx. 2.5% CAGR until 2027. Furthermore, the advancement of vanadium redox battery technology, enabling the storage of energy in industrial and utility scale applications, could significantly drive up demand.