NEW YORK Vanadium prices
are likely to rise in 2013 and 2014 as an increase in demand
from the Chinese steel sector exceeds supply, according to a
Roskill Information Services report.
While the London-based research
firm forecast that the market will "remain broadly balanced"
between 2012 and 2017, having endured a period of volatility
over the previous decade, an increase in Chinese consumption is
likely to once again impact the supply/demand balance.
"With demand expected to
marginally exceed supply in 2013 and 2014, Roskill expects a
recovery in vanadium prices over this period. Consumption is
then forecast to slightly lag production as new capacity comes
on stream between 2015 and 2017 and prices are expected to
remain relatively stable," the report said.
Vanadium pentoxide prices are
expected to reach $11 per pound by 2017, the report added. The
product is currently trading in a range of $6.60 to $6.90 per
pound, according to AMMs most recent
The Chinese steel sector has
become increasingly important to the vanadium market, with
China accounting for 34 percent of global vanadium demand
compared to just over 20 percent in 2006. The trend is likely
to continue, with global steel production forecast to rise by 3
percent annually and the expectation that China will consume
additional quantities of vanadium to meet new rebar
"New design codes in China aim
to restrict the use of lower-strength reinforcing bar and
government directives require the production of
high-vanadium-content alternatives. This has the potential to
increase the intensity of Chinas vanadium usage in steel,
which currently lags those of developed countries such as the
U.S.," the Roskill report said.
The report noted that new
vanadium projects in China and the rest of the world should
meet future increases in demand, "although much remains
dependent on the price of vanadium, which may render a wide
number of producers in China and the rest of the world
uneconomical if it falls below a certain level."