viewBushveld Minerals Ltd

How much is the vanadium price tied to the steel price?

The answer: almost completely, at least for the immediate-term.

The vanadium price has been ticking up

According to data supplied by Bushveld Minerals Ltd (LON:BMN), a major producer of vanadium, steel production accounted for around 92% of total vanadium demand in 2019. Steel production will continue to dominate vanadium demand for the foreseeable future too, although long-term there will likely be increasing use in vanadium redox-flow batteries, which are used to store grid power, amongst other things.

The benefits of using vanadium in steel are universally recognised. Adding vanadium refines the structure and grains of the steel, which reduces its sensitivity to overheating, and increases its strength and toughness. During the heat treatment of steel, the compounds produced by vanadium, carbon, and nitrogen prevents the grains from growing, resulting in steel with high strength and good plasticity and toughness.

READ: Vanadium and lithium ion batteries – what’s the difference?

It’s in this context that the Chinese government introduced new regulations on steel manufacturing in November 2018. These mandate higher strength for rebar, and have underpinned the ongoing recovery in vanadium prices.

“Vanadium demand remains robust, and prices are expected to remain stable for the remainder of the second quarter of 2021, Bushveld stated in an operational update released mid-May.  

In the first quarter of 2021 the London Metal Bulletin Ferrovanadium price averaged US$30.9 per kgV, up from the first quarter average in 2020 of US$26.5/kgV). The current is approximately US$32 per kgV.

Looking ahead, China is expected to install around 30-60GWh of new energy storage capacity by 2030, corresponding to between 28,000 and 56,000 tonnes per year of extra demand for vanadium pentoxide.

So, ultimately, the demand balance is likely to shift, somewhat, towards batteries. For now, though, it’s steel that’s driving the price, and encouraging vanadium companies to be more ambitious.

Thus, Largo Resources (TSE:LGO) is boosting output, and will shortly list on Nasdaq, and Neometals (ASX:NMT) is seeking a dual listing on Aim.

Quick facts: Bushveld Minerals Ltd


Price: 11.2 GBX

Market Cap: £133.6 m

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of named herein, including the promotion by the Company of in any Content on the Site, the Company receives from said issuer annual cash...


Market Report: FTSE follows Wall Street rally after global sell off

FTSE 100 wiped out some of Thursday’s losses at open after a rally on Wall Street, with traders awaiting US retail sales data later today. London’s leading index jumped 41 points to 7,005 in early trading. Airbnb Inc (NASDAQ:ABNB) has seen an increase in bookings in countries where the...

on 14/5/21

2 min read