Vanadium is a grey, soft, ductile metal with several unique characteristics that positions it well in the steel, alloys and chemicals sectors.
Key characteristics of vanadium include resistance to corrosion, high strength-to-weight, weldability and fabricability. Vanadium is water soluble, resistant to attack by alkalis, salt water, hydrochloric and sulfuric acids. Vanadium can exist in four different oxidation states.
The main use of vanadium is as a strengthening additive in steel. A small amount of vanadium adds heat resistance, strength and toughness. Vanadium’s unique characteristics also position it well for large scale, long duration energy storage using Vanadium Redox Flow Batteries (VRFBs).
The first significant commercial and industrial use of vanadium metal was in the early 1900s, where it was used in the vanadium-steel alloy chassis of the Ford Model T car.
Nitrovan® consists of vanadium and nitrogen, which provides more efficient strengthening of steel than ferrovanadium, resulting in reduced usage of up to 40% less vanadium in some steel. By replacing ferrovanadium with Nitrovan®, steelmakers can achieve high strengths more efficiently and at lower costs. For more information about Nitrovan®, please visit www.nitrovan.co.za
Vanadium Industry Overview
The vanadium market is characterised by a robust and growing demand profile and a constrained and concentrated supply. Vanadium supply has seen significant reductions in the past 24 months resulting in a significant structural deficit projected to continue for the foreseeable future. This structural deficit has resulted in vanadium prices significantly increasing since 2016.
Vanadium demand prospects look attractive. Approximately 90% of vanadium demand is still anchored in the steel industry, where growing intensity of use is expected driven primarily by greater enforcement of standards in China requiring higher-grade rebar (which requires greater amounts of vanadium). Meanwhile, reported growth in vanadium demand includes increased usage in non-ferrous alloys (consuming 4.5% of vanadium output) and the chemical industry (consuming 3.5%). The most significant driver of vanadium demand is expected to come from the energy storage sector. Industry estimates envisage vanadium flow batteries’ share of vanadium consumption growing from approximately 1% in 2014, to 3% in 2016 and on to approximately 20% by 2030.
Vanadium supply, on the other hand, is significantly constrained. The closure of Evraz Highveld Steel and Vanadium’s plant and Mapochs mine, as well as the suspension of operations at Vanchem in 2016, removed more than 15% of vanadium supply from the market and left the Vametco mine and Glencore’s Rhovan operation as the only South African producers of vanadium, significantly contributing to the current global strain in vanadium feedstock.
The bulk of the supply feedstock in China comes from steel plants that process low-grade vanadium-bearing magnetite ores to produce steel and a vanadium slag which is then further processed through a process similar to the primary production processes – salt roast and leach operations. This source of vanadium is also significantly constrained on account of:
a)High input costs as a result of mining and processing low-grade captive ores, relative to the higher-quality and low-cost seaborne haematite ore;
b) High processing costs of complex steel plants that have to be designed for extraction of titanium and vanadium resulting in operating costs that are significantly higher than simple blast furnace operations processing haematite ore;
c) No leverage on steel prices as a consequence of the small share of steel production that the high-cost vanadium and titanium bearing magnetite ore processing steel plants have.
As a consequence, these plants are under enormous economic pressure, with some resorting to blending their ores with cheaper and higher quality hematite ores (that contain no vanadium) resulting in further supply reductions. Meanwhile any new meaningful supply will require higher vanadium prices to be sustained, and even then, there are limited new projects with the required vanadium grade to be economic for primary vanadium processing. However, persistent higher vanadium prices will likely provide an incentive for some suppliers to start producing vanadium, notably stone coal miners in China which host sedimentary style vanadium deposits. These operations, though, pose substantial environmental threats, which threaten the feasibility of bringing additional supply onto the market.