Sooner or later we'll shake off the dead wood... and sell into...

Sooner or later we'll shake off the dead wood... and sell into calmer waters with our excellent set of assets and the best management in business... talking about assets ... Reuben Adams commented elsewhere on the growing demand for vanadium:

After a few years in the wilderness, vanadium demand is making a comeback as steel consumption soars, in China and overseas.

92% of vanadium consumption is used to strengthen steel. Of the remainder, most is used in aerospace alloys and chemical catalysts, and 1% goes into vanadium redox flow batteries (VRFBs).

An estimate of USD vanadium prices over the past year Pic: vanadiumprice.com

The party is set to continue — vanadium supply is likely to remain constrained until 2024, Roskill’s steel alloys principal consultant Erik Sardain says.

“If you look at the world ex-China, we aren’t probably going to see a huge increase in terms of vanadium supply – we might even see some declines,” he told S....h...

“Largo Resources is not going to increase production a whole lot, while Bushveld Minerals has been cutting guidance and all the unrest in South Africa won’t help either.

“Chinese [steel mills] are always a little trickier to predict, but I believe that they are probably very close to their production capacity [of vanadium slags].”

The market is going to shift from surplus in 2020 into deficit in 2021, Sardain says.

“Moving forward in the next couple of years, supply is likely to remain tight in 2022 and 2023 until new projects come online from 2024.”

Vanadium batteries: the wildcard

In 2018, the Hornsdale lithium-ion power reserve — also known as ‘Tesla’s Big Battery’ – was built in South Australia.

Much maligned and misunderstood early on, the positive impacts of the battery’s services have well and truly been recognised. Lithium-ion stationary storage has since exploded.

Unlike lithium-ion, vanadium redox flow batteries (VRFBs) – a perfect fit for stationary storage — are yet to have their ‘big battery’ moment.

Right now, it’s mostly a case of ‘talk the talk’, not ‘walk the walk’, Sardain says.

“It is early days. In 2021 we expect to see some new installations, but it will probably remain quite small in 2021,” he says.

“Our base case is that by 2030, 10% of vanadium demand is going to come from batteries [up from ~1% currently].

“But if the tech develops, this estimate will be far too low; if it doesn’t take off, that estimate is far too high.”

In other words, vanadium batteries are a binary proposition. It is either going to work, or not.

One thing is clear — China will be the driver if the technology is to succeed.

“I strongly believe that the VRFB technology is going to come from China, or it is not going to happen,” Sardain says.

“If the Chinese demand take off the rest of the world will follow.

“Is the tech going to be developed, or will another tech turn out to be more economical? It is difficult to say.

“We have to see how things develop in the next 2-3 years.”

GLTAH