China’s new high-strength rebar standard is designed to limit the use of inferior steels in construction. The standard eliminates low strength Grade 2 rebar and sets out specifications for three different high strength standards: Grade 3 (400MPa), Grade 4 (500MPa), and Grade 5 (600MPa). These will require 0.03% V, 0.06% V, and more than 0.1% V respectively.
Roskill view: Key changes to rebar policy in China were made in response to the 2008 Sichuan earthquake, which killed an estimated 68,000 people. Many victims were fatally injured by disintegrating and falling fabricated floor systems in brick and concrete structures, as buildings were not reinforced suitably. New design codes were issued in December 2010 and took effect in August 2011. These new codes aimed to restrict and gradually eliminate the use of lower strength bars (Grade II).
Generally speaking, such changes to domestic construction regulations have led to increased ferrovanadium consumption but the uptake in production and consumption of higher-grade rebars has been gradual, as the government permitted companies to wind down their inventories. From 2013 onwards, laws and regulations have been more strictly enforced, however, reports in China have suggested that “fake” rebar of Grade III and above are sometimes sold, which are, in reality, lower-grade alternatives.
While the recent announcement is, therefore, highly positive for vanadium demand, it will be important to monitor the implementation of the new standard over the coming months. The news is likely to help keep prices high over the short term. Ferrovanadium prices reached US$60/kg in February, up from below US$30/kg six months ago. Robust demand, feedstock tightness in China, and the knock-on effects of recent closures have all helped sustain high prices.
Roskill’s Vanadium: Global Industry, Markets and Outlook report was published in December 2017. Click here to download the brochure or sample pages or access further information.