Vanadium production is increasingly controlled by integrated steel conglomerates and diversified mining companies. However, several new primary mine projects are forecast to contribute to the supply picture in the coming years. These companies are developing properties in countries traditionally overlooked by the vanadium market. Meanwhile, South Africa, China, and Russia are expected to expand their vanadium production capacities over the projected period. China is slated to become the top producing country as medium-term concerns about electricity supply impact South Africa, currently the largest vanadium-producing country. The bulk of new primary and slag supplies are expected to come online after 2011, which should relieve the deficit experienced in the vanadium market since 2003.
Over the past five years, vanadium demand has increased at a robust rate. CPM Group projects this growth continuing, as the steel quality standards in emerging economies increase. The majority of demand for vanadium comes from the steel industry, where ferro-vanadium is alloyed with other elements to create multifunctional steels. Vanadium is critical in imparting strength, toughness, and wear resistance. These properties are especially important in high-strength low-alloy (HSLA) steels, which are growing in usage as the energy, transport, and construction industries seek to maximize the strength while minimizing the weight of their products. The growth potential in vanadium's other end-use industries is present as well. Aerospace applications are rapidly expanding in tandem with the introduction of next generation commercial aircraft. In fact, vanadium-bearing titanium alloys used in aircraft have very limited substitutability.
The outlook for vanadium prices going forward is positive. They are anticipated to remain above historical averages, though should fall moderately as supply issues are rectified. A narrower deficit in the next few years will help correct prices from the record levels seen in the last three years. Prices are forecast to experience a rather steep decline in 2011 as the market transitions to a surplus, according to the detailed mine by mine breakdown in the report. Thereafter, vanadium prices could decrease steadily. Nonetheless, a high price environment is expected to be sustained.
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The projections of the underlying analyses are used by mining companies in their feasibility studies and financing work on new mines and expansions, as well as for long range planning by both producers and users of vanadium. Institutional and high net worth individual investors also use the report in their decision-making process when evaluating investing in vanadium companies. You may visit To purchase the report, please contact Adam Crown at (212) 785-8320 or vanadium@cpmgroup.com.
