By Karan Kumar — Exclusive to Vanadium Investing News
Demand for vanadium - a soft, silvery gray mineral used primarily to strengthen s teel - is expected to more than double to 123,000 metric tons a year in 2025 from current levels, as briskly industrializing BRIC countries require more steel to fuel their growth. Even though China, India, and Brazil are expected to see lower growth than was expected in coming years, the impact on vanadium demand is likely to be small.
"There's a lot of drivers happening, whether it's motor vehicles, whether it's washing machines, whether it's structural steels, whether it's just across the board, as the world urbanizes it needs better quality steels and those better quality steels can only be achieved through using ferrovanadium or vanadium as a strengthening agent," Michael Minosora, managing director of Australia's Atlantic Ltd. (ASX: ATI), told Platts in an interview. China will need around 20,000 metric tons of vanadium in the next two years, Minosora said, adding that African nations and others, such as Vietnam, will see vanadium demand rising. A major factor expected to boost vanadium demand is a directive by the Chinese government, passed on July 1, 2011, that requires the use of grade 3 rebar steel in all new buildings. A higher quality of steel, grade 3 rebar also includes a higher amount of vanadium. According to Australia's Atlantic, 90 million tons of grade 2 rebar produced to grade 3 standards would require an additional 27,000 tonnes of vanadium a year. BRICs to continue fueling vanadium demand “Clearly steel demand coming from the BRICs and other emerging markets accounts for the majority of vanadium demand today and likely in the future,” Chris Berry, founder of House Mountain Partners, which conducts research on the commodity and energy markets, told Vanadium Investing News in an interview. “China is the lynch pin of global commodity demand and is the largest producer and consumer of vanadium as it is for a host of other metals as well,” Berry said. “South Africa and Russia are responsible for the majority of the remaining global vanadium supply but as countries such as China adopt stricter building codes which necessitates vanadium in rebar, it is clearly emerging markets focused on infrastructure build-outs that will drive vanadium demand going forward.”