North American Market
The main use of Vanadium today is in light weight high-strength alloy steels. Just ~0.1% of Vanadium can double the strength of steel.
This has a very strong economic and environmental impact as it allows producers to build superior products with less steel. This saves significant material costs and reduces the amount of resources to mine. Vanadium has also been dubbed "the electric metal" for its bright future in energy storage and green technology. Highly concentrated and economical sources to mine are only found in China, South Africa and Russia. In 2007 & 2008, VanadiumCorp acquired two of the most prolific Vanadium projects in North America.
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Market Basics & Outlook
World Vanadium production is estimated to have been about 76,000 tonnes in 2012. China is the main producer of Vanadium currently accounting for 58% of world supply with South Africa the second largest at 15%. Up until 2007, South Africa was the leading producer of vanadium globally. In more recent years, South African supply has become the subject of concern, with periods of decline in production rates.
Total world consumption reached a record high of 78,000 tonnes in 2012. Since almost all Vanadium is consumed in the production of steel, consumption trends are greatly influenced by the trends in steel production, however, organic growth has also occurred through larger usage of Vanadium in a wider range of steels. Demand drivers include higher quality steel standards in BRICs, the growth of Vanadium use in steel production, and the growth in applications for Vanadium.
Roskill forecasts that global demand for Vanadium will increase by about 28,000 tonnes between 2012 and 2017. The World Steel Association forecasts that steel production will increase by 3% between 2012 and 2017 dependent on both steel market trends and Vanadium usage within steel.
Although China is a main world producer of Vanadium, its new government regulations on rebar quality standards are expected to heavily impact the Vanadium market. As these new regulations are implemented in China it is expected that additional quantities of Vanadium will be required to maintain a balanced global market.
Construction trends will also influence the future outlook of Vanadium consumption. Oxford Economics forecasts that U.S. and Chinese construction sectors will expand by between approximately 4.5 – 7.5% from 2016 to 2021: China is expected to experience the strongest construction growth.
An increased world demand for all energy sources, including demand for new pipelines and repair of current infrastructure in the oil and gas sector, may further influence the outlook of Vanadium usage.
Overall, Roskill expects a very tight supply/demand market balance for Vanadium with a CAGR of 6.5% through to 2017.
Vanadium in its pure form is a soft, grey, ductile element primarily derived from mined iron ore and steel slag. A small amount of Vanadium (typically 0.04 – 4% in steel compositioni) forms carbides in steel and promotes fine grain size, a process which imparts hardness, wear resistance, seismic resistance and increased strength to the steel.
Vanadium has the strongest strength to weight ratio of any alloy. It is the most commonly used alloy for strengthening steels and is used primarily in the construction, infrastructure and transportation industries. Its anti-corrosive properties also make it ideal for use in industrial applications like chemical and power generation plants as well as in oil refineries. Also when alloyed with titanium and aluminum, small amounts of Vanadium help form very strong, lightweight engineering materials which are ideal for use in the aerospace and aviation industries.