The image below probably best explains what the new Rebar Standards might do - taken from page 22 of this presentation
https://www.tmtlimited.com.au/sites/default/files/asx-announcements/6889595.pdf
Here is quote from Metals bulletin as well:
https://**promotion blocked**/Article/3777978/2018-PREVIEW-Chinese-vanadium-market-facing-deficit-on-new-rebar-standards-ban-on-slag-imports.html"
The new standard proposes eliminating 335MPa-tensile strength rebar and replacing it with 600MPa-tensile strength rebar that will have greater earthquake resistance, which will mean producers will have to add greater quantities of vanadium to the production mix. The overall consumption of vanadium in crude steel varies widely across the world. It averages 37 grams per 1,000 tonnes (g/kt) in China, far less than the 73g/kt in Europe and 93g/kt in North America, Metal Bulletin has learned."
In effect the new rebar standards, IMO will double the vanadium need in steel in China, and the reason for them is actually to 'earthquake proof their building" given what has happened in some cases in China through natural events like earthquakes. Obviously China we use its buying power to seek to curtail price growth, which it has been able to successfully do to date IMO. Hence why I feel vanadium potential producers need to get smart and seek to get equity stakes in their projects from non-Chinese entities as that would reduce China's influence on prices and/or get them to the party a lot earlier in showing their hand - refer Post #:
37712728I also think the vanadium demand outlook might be under-estimated by the market as well (but I suspect the market might be thinking if vanadium prices go too high substitution effects will happen, but I suspect vanadium prices will be in the US$10 per pound to US$15 per pound for steel requirements longer term hence that would bode well for increased takeup IMO). Refer: Post #:
36982141 and this was the article I was referring to
https://**promotion blocked**.com.au/china-new-vanadium-steel-rebar-standards/From the above article this quote is important IMO:
"
Adding to the situation is the prediction new vanadium supply will not come online until at least 2022.And, until then, it’s estimated about two new operations the size of London AIM-listed Bushveld Minerals’ Vametco asset are required to come online each year for the next seven years just to meet projected market consumption."For batteries, you probably can add US$3 per pound to the long term average price IMO
With the new rebar standards I do expect there to be room for AVL's development but both need to get their act together if want to enter the market in 2021, rather than later than this date, but from a personal perspective I think AVL and TMT should actually be working together (share infrastructure where possible particularly relating to the gas pipeline) to improve NPV for both and get to market earlier. AVL and TMT are currently working as
if IMO the competition for the next vanadium play is between them but that is not the case and getting to market ASAP is the priority here IMO. They could both miss the boat if don't get their act together IMO.
All IMO
(20min delay)