Vanadium demand forecast18 Mar 2021 03:36
One metal is defying the general gloom of the mining markets.
Its price has gone up by over 800% in the past two years and is now near an all-time record high.
And "all-time" is a long time for this metal. It has roots in the B.C. era as the material that allowed Damascus swords to be so strong and flexible.
In the modern era, it was one of the ingredients that allowed Henry Ford's Model T to be such an early hit with the masses. It was even touted in early advertisements for the car.
I'm talking about vanadium.
And you may have seen it in the headlines recently because prices for it are truly reaching new highs on what seems like a daily basis at this point.
It has created a media and investor frenzy reminiscent of lithium and cobalt. And frenzies like this, though they can be short-lived, are where a lot of money is made in the mining world.
Vanadium Headlines
The short version of this boom is that vanadium is used as a strengthening agent in steel — the same way it was in Damascus swords all those years ago. Globally, a certain percentage of vanadium is required to be added to steel for this purpose.
In November, China increased the amount of vanadium required in steel produced there, which effectively doubled its internal demand.
China makes half of the world's steel and also produces the bulk of its vanadium. And this change is expected to turn it from a vanadium exporter to an importer.
This alone is enough to cause the dramatic run in vanadium prices we're seeing now:
Vanadium PricesBut there's another factor at play...
About 90% of vanadium demand is for its use in steel. But it has a new and growing use as a major battery fuel that's making markets doubly excited.
Vanadium redox flow batteries are proving to be big winners in the industrial-scale battery world, where they can store vast amounts of intermittent solar and wind energy and also release it to help even out peaks and troughs of grid demand.
Take it from this recent Bloomberg article that explained why vanadium is the "Best-Performing Battery Metal of the Past Year":
Currently, the dominant form of energy storage is lithium-ion technology, but there are advantages to vanadium-flow batteries. They last longer and can be charged and discharged repeatedly without any significant drop in performance. They are also easy to recycle and good for projects where space isn't an issue.
"I don't think anyone would dispute that it's superior to lithium-ion in large-scale grid applications," said [Anthony Milewski, a managing director at Pala Investments Ltd. in Switzerland].
Ultimately, the only thing that matters for industrial-scale batteries is cost. And it's what severely limits lithium-ion batteries when they're attached to the power grid.
The cost is too high, compared to just adding more generating capacity, to the point where it won't be a long-term solution.
The problem comes from an insurmountable issue.
Continued .....
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