Vanadium Overview

As economies around the world began to recover from the devastating impact of the COVID-19 pandemic, industry pundits anticipated demand for vanadium to improve in 2021. This expectation was fuelled by the fact that the vanadium market was, at the start of 2021, in a slight deficit of 317mtV, with supply at 119,750 mtV. Demand did indeed grow during the period under review, driven by a rebound in global steel production and consumption, excluding China, although demand was robust in the first part of the year. Though still relatively small vanadium consumption in the energy storage sector also witnessed growth, as more projects were implemented.

Vanadium demand in 2021 was approximately 120,067 mtV with the steel production and vanadium redox flow battery (VRFB) markets accounting for 92 per cent and two per cent of the vanadium consumption, respectively.

Prices traded in a fairly broad range, with the average price for the year being US$34.31kgV (2020: US$24.99/kgV) for the London Metal Bulletin in Europe, US$34.86/kgV (2020: US$28.83/kgV) for Ryan’s Notes in North America and US$33.52/kgV (2020: US$25.36/kgV) for the Asian Metals in China. In the final quarter of 2021, vanadium traded at an average price of US$32.33/kgV. While this is, 38.1 per cent higher than the previous year, it is marginally lower than long-term historical average vanadium prices.

Vanadium Market fundamentals


Vanadium supply is concentrated – by type of production and geography. The most common occurrence of vanadium is in vanadium and titanium bearing magnetite ore bodies from which vanadium is extracted either directly (primary production) or indirectly as a vanadium rich slag during steelmaking or pig-iron production (co-production):

  • Co-production – where a vanadium-rich slag is produced by steel plants processing vanadium-bearing magnetite ores.
  • Primary production – where vanadium is produced as the primary product directly from processing vanadium bearing magnetite ores.

Co-production is the most significant source of vanadium supply, accounting for an estimated 73 per cent of production in 2021. Most of these steel slag producers are situated in China and are operating at close to full capacity. Their economics are driven by steel and iron prices and not by the vanadium market.

Primary production was estimated at 17 per cent of global supply in 2021. The main producers are Bushveld Minerals and Glencore in South Africa, and Largo Resources in Brazil. These three companies have large reserves of high-grade ore and the ability to bring more tonnes to the market at a low production cost.

Apart from vanadium bearing magnetite ores, some vanadium production, also derives from secondary sources (secondary production) Secondary production is the recovery of vanadium from such as fly ash, petroleum residues, alumina slag, and from the recycling of spent catalysts used in crude oil refining. Secondary vanadium production It accounted for approximately 10 per cent of global supply in 2021. It is Being dependent entirely on other industries for its feedstock, it can only increase production if more spent catalysts are available.

In 2021, global vanadium supply increased to 119,750 mtV from 116,128 mtV in 2020.

The world’s top vanadium producer, China, accounted for 61 per cent of global vanadium supply in 2021. Most of its vanadium was derived from co-production as most slag producers are Chinese steel mills. Russia is the second-largest producer and South Africa the third-largest, accounting for 17 per cent and seven per cent of 2021 supply, respectively.

Like most ferroalloys, vanadium has been and still is largely exposed to the market characteristics of steel and more specifically to the Chinese steel industry. Although Chinese steel production fell by three per cent relative to 2020, due to the country’s COVID-19 mitigation measures, the world’s largest steel producer accounted for 53 per cent of the world steel production at 1,033 Mt in 2021.

New vanadium supply may be triggered by the gradual implementation of International Maritime Organization’s (IMO) 2020 standard that introduces a new limit on sulphur emissions for ships operating outside designated emission control areas. The cutting of sulphur in bunker fuel would increase the volume of recycled spent oil catalysts. According to Wood Mackenzie, this increased vanadium supply could either displace projects with weaker economics or create a larger and more durable surplus. Nevertheless, secondary production is limited by both the availability of the necessary feedstock and the high costs of production.

Opportunities for growth in vanadium supply can be considered across three categories: capacity expansions of current producers, re-commissioning of production plants that have been mothballed, and greenfield project development. Capacity expansions have the highest probability of realisation, with the lowest capital requirements and fastest path to production. New greenfield projects face the most significant hurdles and the longest development timelines. Most of the recent greenfield projects announced for development are of a co-production or multi-commodity nature, suffer from relatively low grades and require significant capital and a relatively stable and higher price outlook than recent prices indicate.


Global vanadium consumption increased by approximately seven per cent to 120,067 mtV in 2021 from 112,157 mtV in 2020.

The steel industry accounted for 92 per cent1 of total vanadium demand in 2021. It is expected to continue underwriting vanadium demand, led by China which accounts for about 60 per cent3 of global vanadium consumption and whose growing intensity of use of vanadium in its steel sector thus maintaining positive vanadium demand momentum.

Notwithstanding regulation-driven growth in Chinese intensity of use of vanadium, China’s vanadium usage intensity, at 63 g/t of crude steel, still lags that of the developed economies in Europe, Japan and North America at 80 g/t. This suggests further support for demand even in a market expecting peak steel production later in 2022. Consumption of the metal from the steel sector is forecast to rise by 2.8 per cent in 2022 to 113,100 mtV. In the medium-term Wood Mackenzie forecasts that vanadium demand in the steel market will grow at a CAGR of about 3.1 per cent through to 2030, when it is expected to reach approximately 136,000 tonnes by 2030.

The VRFB sector has the potential to create an additional large market for vanadium and transform the commodity into a prime energy metal. VRFB development could also support the development of new magnetite greenfield projects, producing high-purity vanadium pentoxide or trioxide for battery use.

In addition, as the requirement for energy storage for renewable energy sources increases, demand for vanadium from this sector is expected to increase over the coming years. While forecasts vary for energy storage market growth, they all agree on substantial if not exponential market growth, driven by the energy transition to greener energy. Similarly, forecasts for the market penetration of vanadium redox flow batteries (VRFB’s) in this sector vary. Yet even the more conservative estimates see vanadium demand from the energy storage fundamentally shifting vanadium demand in the future. Still, the question is how quickly this demand actualises, in a stationary energy storage industry that, while seeing increasing momentum, is still nascent. The growth in the number of large-scale vanadium redox flow batteries being commissioned or developed in recent years is encouraging in this respect. Examples include Sumitomo 51MWh VRFB installation in 2021, as a follow up to a 60MWh installation in 2015, and Rongke Power’s 800 MWh project in Dalian, China, to mention a few.

According to Guidehouse Insights, global annual deployments of VRFBs are expected to reach approximately 32.8 GWh in 2031. This presents significant growth with a CAGR of 41 per cent across the forecast period.

Vanadium price outlook

The outbreak of war in Ukraine in February 2022 led to volatility in the vanadium market. This compounded an already tight market and resulted in vanadium prices spiking in March and into early April.

2021, saw challenges presented by global logistical delays which affect the supply chain which contributed to the irregular prices in North America relative to prices in Europe and China. In February 2022, supply disruptions generated by the Russia-Ukraine conflict resulted in increased buying of Chinese ferrovanadium. This trend continued through April and trade data shows that ferrovanadium exports rose to 934 t (gross) in April, up 176 per cent year-on-year. The majority of these shipments have been destined for the Netherlands, Japan and South Korea.

Ferrovanadium prices rose rapidly through February and early March, driven by the combination of tight supply and market volatility. European ferrovanadium prices averaged at US$45.3/kgV in Q1 2022 and Chinese ferrovanadium prices averaged at US$46.4/kgV, which was an increase of 41 per cent and 28 per cent on the previous quarter, respectively. These factors hit the North American market most severely, where prices were anomalously high in March at US$73.50/ kgV, representing a premium of over 18 per cent over regions.

China’s ongoing battle against COVID-19 and strict lockdowns has led to a weaker macroeconomic outlook, however, even with the reduction in the demand forecast as expected by Wood Mackenzie, a small deficit is expected this year.

In the VRFB space, there have been further announcements for developments not just in China but also in the North American and African markets. Wood Mackenzie maintains its previous forecast for annual VRFB installation capacity to rise to 1.5 GWh in 2024, which equates to 7.1 ktV consumption in 2024.

From 2024, Wood Mackenzie expects the market to enter a surplus as new greenfield projects come on-line and will outpace demand growth. It is worth noting that Wood Mackenzie assumes that all new projects announced will come into production, which may be an overly bullish assumption. This surplus is expected to peak in 2025-2026 and the market should gradually rebalance supported by growing demand due to higher intensity of use of vanadium in steel and as well as demand from vanadium redox flow batteries.

Overall, we retain our in-house view that supply remains concentrated and constrained with only limited new supply expected from primary greenfield projects, while co-production is still mainly driven by steel and iron ore fundamentals. As a result, primary producers of vanadium remain best positioned to meet the growing vanadium demand in the medium term

A green commodity for the future

Vanadium’s benefits to a greener, more sustainable society include its contributions as an alloy in high-strength, low-alloy steels, primarily used in construction. A recent study quantified this benefit as equivalent to the annual CO2output of the Philippines or annually “planting approximately 260 million trees.” Its use as the critical mineral in energy storage coupled with electricity generation from renewable energy sources, further positions vanadium as a green commodity for the future.

In the aerospace sector, vanadium has long been used to ensure low density, high strength, and strength at high operating temperatures which is essential in aero-engine gas turbines and airframes. Development of new titanium alloys continues and grades containing 8, 10 and 15 per cent vanadium have even higher strengths. They have the potential to make important contributions to weight reduction and fuel efficiency in the aircraft of the future.

One of the key green applications of vanadium, with even more potential future upside, given the energy transition, is in VRFBs used for grid energy storage. VRFBs are safe and have a long lifespan, enabling them to repeatedly charge/discharge over 35,000 times for a lifespan of over 20 years. They also have a lower manufacturing carbon footprint than lithium-ion batteries.

Bushveld Minerals is building its own VRFB solar mini-grid at the Vametco mine. This will decrease the Company’s carbon footprint, as it will reduce CO2 emissions by more than 8,000 metric tonnes per year (and nearly 200,000 tonnes of CO2 over the life of the project).


  1. Wood Mackenzie, Nobel Steel Alloys, Short term, Outlook May 2022
  2. World Steel Association, 2021 global crude steel production totals
  3. Bloomberg, December 2021, June 2022
  4. Texas A&M Study

The Case for Vanadium Redox Flow Batteries in Energy Storage

The energy sector is undergoing a fundamental transition, both in the extent of electrification and the overwhelming trend toward renewable sources of energy.

The importance of electricity is increasing, a critical factor of the “energy transition” and the path to net zero carbon emissions. Electricity’s share of global energy consumption is expected to continue to grow at a rapid pace, doubling from 10 per cent in 1980 to 20 per cent today to over 40 per cent by 2050. At the same time, renewable energy is displacing the predominance of fossil fuels in energy generation. These two changes have enormous implications, not only for global energy production, but for all minerals involved in energy related value chains.

Electricity is much more difficult to “store” than other types of energy, and the acceleration of demand is further increasing the need for stationary storage, such as large batteries. On top of that, the variability of renewable energy sources such as solar, wind and tidal, further exacerbates the daily misalignment between electricity production and consumption.

Both aspects increase the need for stationary energy storage, especially long-duration storage (four or more hours per day). Storage is essential to support the growth in electricity demand while enabling the energy transition to a carbon neutral world. Thus, energy storage is now one of the most dynamic and rapidly advancing sectors in the broader technology industry, recognised for its ability to fundamentally reshape the power system.


According to Bloomberg New Energy Finance, global stationary energy storage installations will grow 122-fold from 2018 to 2040, rising from 17 GWh to 2,850 GWh by 2040.

Unsurprisingly, investment into battery technologies is also accelerating. Mercom Capital reported that in 2021 corporate funding of battery storage companies reached US$17 billion, compared to US$6.5 billion in 2020 and US$2.8 billion in 2019, almost tripling each of the past two years.

  • According to Bushveld’s own analysis, South Africa may be one of the top-five utility energy storage markets in 2022.
  • Over 1,440 MW of utility procurement has already been announced, including;
  • 350 MW from the first phase of the World Bank-funded Eskom battery procurement programme (already tendered).
  • 578 MW from storage co-located with renewable energy in seven awarded projects in H1 2021, under South Africa’s Risk Mitigation Independent Power Procurement (“RMIPP”) round.
  • 513 MW in new tenders announced by the Department of Mineral Resources and Energy for H2 2021 that are included in the South African Government’s Integrated Resource Plan.

Within the roughly 8,000 MW global forecast from Guidehouse Insights for 2022 for utility scale storage, South Africa is poised to account for approximately 15%.


Bushveld Minerals supports the demand growth of mined vanadium through Bushveld Energy, a subsidiary that participates in the global value chain for energy storage. It is doing this through the construction of a vanadium electrolyte plant and investment in Vanadium Redox Flow Battery (VRFB) companies and manufacturing. In addition to this, Bushveld has an energy storage project development business focused on the African market, an area traditionally under-served but which offers immense growth potential.

The VRFB is the simplest and most developed flow battery in commercial operation. The technology is durable and has a long lifespan, low operating costs, is safe in operation, and has a low environmental impact in manufacturing. Furthermore, the vanadium used in the batteries can be easily recycled. The storage system can work in tandem with other technologies to fill demand in a growing energy storage market.

Advantageous features of VRFBs include:

  • Long-lifespan, with ability to charge/discharge more than 35,000 times for over 20 years;
  • 100 per cent depth of discharge, allowing the entire battery to be used all the time;
  • Lowest cost per kWh at long duration, lower than Li-ion batteries, when fully used at least once daily;
  • Safe, with no fire risk from thermal runaway;
  • Very fast response time of less than 70 milliseconds; and
  • No chemical cross-contamination as only one battery element is used, a unique feature among flow batteries.

Overview of Vanadium Redox Flow Battery Technology

In addition, VRFBs have existing supply chain synergies with industries such as vanadium mining and vanadium chemicals production. These existing capabilities and facilities can be expanded to produce more vanadium or recycle existing electrolyte.

Despite the many advantages, as a technology in the early stages of commercialisation, VRFB markets still face commercial challenges. Misconceptions about costs and comparisons based purely on upfront rather than lifetime costs are significant barriers for VRFBs. Furthermore, a historical market for short duration storage has positioned Li-ion batteries as a dominant incumbent battery technology. Increasing understanding, reaching economies of scale and developing innovative funding solutions to overcome these barriers will lead to VRFBs’ continuous growth in the storage industry.

As VRFBs solely rely on vanadium as a mineral and because the chemistry itself does not degrade from usage, either the vanadium or the entire electrolyte in VRFBs can be re-used, creating an opportunity to devise innovative financial solutions, such as electrolyte rental. Such innovation increases the circularity of vanadium and the sustainability of VRFB technology. Furthermore, these solutions accelerate adoption of VRFBs at commercial scale by reducing the upfront capital costs, while creating new economic opportunities for vanadium producers.

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