Vanadium demand set to surge from the high strength steel sector
Vanadium demand will continue to strengthen due to demand for higher strength steel from the steel industry, as well as incremental new demand from Vanadium Redox Flow Batteries (VRFBs). Vanadium is one of the 35 minerals deemed critical to US national security. It has multiple uses in today’s modern world from being used in steel manufacturing, VRFBs, tools, and even nuclear power plants. Around 85% of vanadium production is used as a steel strength additive. Even Henry Ford used vanadium in his car manufacturing process and it is used to harden re-bar steel in building construction and tool making.
VRFBs have unique characteristics that make them ideal in the energy storage space. A VRFB typically is charged using renewable energy such as wind turbines or solar panels. The VRFB has several unique characteristics that give them an advantage for large scale commercial energy storage. They can charge and discharge at the same time, and they can last up to 25-30 years with continued daily use.
On the supply side, there will be some new supply from existing producers such as Bushveld, AMG and Largo Resources over the next 3 years. The question is whether this can keep up with surging demand and what happens post 2021. The graph below forecasts demand will outstrip supply, especially after 2021.
Vanadium total demand forecast to outstrip supply 2019-2025
United Battery Metals Corp. (CSE: UBM) is a vanadium and uranium exploration company in North America. United Battery Metals flagship vanadium project is their exploration stage uranium-vanadium Wray Mesa Project.
The Wray Mesa Project
Get our daily investorintel update
The Company states: “Because of the presence of uranium and vanadium in the region, the project area, along with the parts of southwest Colorado and southeast Utah, has been intensively studied by both public and private-sector investigators. Principally leading the public sector workers were geologists of the USGS and of the Atomic Energy Commission (AEC) during the 1940’s through the 1970’s.”
The Wray Mesa Project location and topography map
China has been leading the demand surge for vanadium for both higher strength steel rebar and for VRFBs. Both of these demand drivers look set to continue. It is also significant to note that the world is moving towards electrification of the transport sector. This means an additional huge demand for electricity and energy storage.
United Battery Metals strives to be a leader and an eventual producer of vanadium. If United Battery Metals Corp. can prove up a good size vanadium resource then they can position themselves to be a North America’s vanadium producer in the 2020’s to meet the expected vanadium demand surge.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>