Vanadium: 2019 set to be interesting year for the market

Last week, Roskill attended and presented at the FerroAlloyNet Vanadium conference in Chengde, Hebei Province, China. Market sentiment was optimistic, although there remains some uncertainly as to how the market will develop this year and beyond.

Roskill view:

Vanadium prices increased dramatically last year as the market moved into structural deficit. While prices have fallen back from their 2018 peak, they remain elevated: ferrovanadium prices have averaged around US$75/kg in Europe so far this year.

High prices are a feature of both supply-side and demand-side factors. On the supply side, a reduction in global feedstock capacity, dwindling global inventories, feedstock tightness in China, and trade issues have been key issues. On the demand side, the introduction of new rebar regulations in China, designed to limit the use of inferior steels in construction, have had a major impact on global price levels.  

Consensus on the ground in China is that the enforcement of new rebar regulations (currently a tolerance period is ongoing) will ramp-up, albeit gradually, in 2019. This will increase China’s intensity of use of vanadium and drive strong growth in vanadium demand. As a result, Roskill expects the market to remain in deficit for some time. There can only be a limited short-term supply response as vanadium co-producers (which account for 70% of supply) are governed by iron and steel market dynamics. There is also limited upside potential from primary and secondary supply, save for Chinese coal stone (an important vanadium-bearing resource in China).

Roskill’s NEW Vanadium: Market Outlook to 2028 report was published in March 2019. Click here to download the brochure and sample pages, or to access further information.

To discuss the vanadium market with Roskill, contact Jack Bedder: jack@roskill.com