Dr. Spencer of U3O8 Corp. on the vanadium redox battery market demand

July 5, 2018 – “As China and India change their building codes so the buildings can withstand earthquakes, the amount of vanadium that goes into the rebar increases. The steel industry has been growing at about 3.8% over the last 10 years. Vanadium in that steel is growing at about 8% because they need more vanadium and it is being dictated that they have to use more vanadium in building steel. That is over 90%. There is also vanadium going into titanium alloys for the aerospace industry and that is huge. But, the most exciting component of the vanadium space is vanadium redox battery.” States Dr. Richard Spencer, CEO, President and Director of U3O8 Corp. (TSX: UWE | OTCQB: UWEFF), in an interview with InvestorIntel Corp. CEO Tracy Weslosky.

Tracy Weslosky: I do not think many of our investors out there in the InvestorIntel audience appreciate that U3O8 has vanadium. Why do we not start there? 

Richard Spencer: We have a huge amount of vanadium. Vanadium would be the coproduct with uranium out of the project in Argentina and the project in Colombia. Both projects, the process that we use to extract the uranium would also extract the vanadium and a couple of other byproducts as well.   

Tracy Weslosky: Many of us know you as a world renowned expert on uranium. Let us talk about your expertise on vanadium. For those of you that may not appreciate what a significant critical material that vanadium is, let us start there. Tell us a little bit about vanadium, the vanadium market in general please. 

Richard Spencer: Over 90% of it is used in the steel industry, in rebar particularly. As China and India change their building codes so the buildings can withstand earthquakes, so the amount of vanadium that goes into the rebar increases. The steel industry has been growing at about 3.8% over the last 10 years. Vanadium in that steel is growing at about 8% because they need more vanadium and it is being dictated that they have to use more vanadium in building steel. That is over 90%. There is also vanadium going into titanium alloys for the aerospace industry and that is huge. But, the most exciting component of the vanadium space is vanadium redox battery. These things are the ugly duckling of the battery industry. They are not miniaturizable. They will never be in cellphones. They will never be in computers and that kind of thing. These are great big honking industrial-scale batteries. They are easily scalable. Basically they are just two tanks. They have got vanadium +4 and +5 on the plus side of the battery, a tank, and in the liquid on the other side of the battery, on the negative side, is vanadium +3 and +2. These are just liquids. They can be charged instantaneously basically, I mean, in a lithium-ion battery because there is a crystal structure in there. Each little ion has to move out of there and that wears the battery out. If that same material is in a liquid, like it is in a vanadium redox battery, there is nothing to wear down. These batteries are guaranteed for 20 years. A lithium-ion battery, as we all know from our computers, degrades after 3, 4, 5 years or however long it is…to access the complete interview, click here

Disclaimer: U3O8 Corp. is an advertorial member of InvestorIntel Corp.




Vanadium is still a hot sector right now, but can it be maintained?

In the past year and a half the Chinese vanadium spot price has tripled from US$5/lb to reach US$15.80/lb. Reduced supply and the new Chinese rules to increase vanadium content in steel rebar have been well publicized and are responsible for most of the rise. The more interesting aspect to the demand story is the new demand starting from Vanadium Redox Batteries (VRB’s). After a strong surge in vanadium prices, can it be maintained?

China V2O5 Vanadium Pentoxide Flake 98% Price USD / lb

Robert Friedland is backing VRB

In 2017 Robert Friedland stated: “We think there’s a revolution coming in vanadium redox flow batteries (VRFB).” To date he has been right.

World’s largest battery: 200MW/800MWh vanadium flow battery – site work ongoing

The next wave of vanadium demand to come from Vanadium Redox Batteries (VRB)

Currently VRB’s are responsible for less than 5% of vanadium demand. New vanadium demand is coming from China due to an increase in vanadium flow batteries used for large scale energy storage. China has a plan to launch multiple pilot projects in the order of 100-MW-scale vanadium flow batteries by the end of 2020. For example, on the Dalian Peninsula in China, they are building a 200 MW VRB system. The $500 million battery system will single-handedly triple China’s grid-connected battery storage capacity. Below are some vanadium demand forecasts.

  • ASDReports – Vanadium redox flow batteries will grow from $230.2 million in 2018 to $946.3 million by 2023, at a CAGR of 32.7%.
  • EPRI – “If VRFBs capture 25% of the forecast 10GWh annual market by 2025, energy storage will demand almost 14,000 tones of vanadium annually. Each GWh of VRFB storage requires 5,500 tones of vanadium.”

History has shown that when a new disruptive technology arrives it takes off faster than what most analysts forecast. Given the inherent advantages of VRB’s for large scale commercial applications, combined with China and the World’s enormous push to renewable energies such as solar and wind, it becomes clear that vanadium demand is likely to surprise on the upside.

Vanadium supply

In recent years vanadium supply has decreased due to several factors such as China’s environmental rules tightening, and past lower vanadium prices. The recent price increase will encourage new vanadium projects, funding, and in time new supply. The issue here is that significant new supply takes time to come up, especially from new projects where there can be at least a 3-5 year time lag.

Final verdict

Like most commodities higher prices results in increased supply, which results in lower prices, and hopefully reduced supply. Right now in the cycle we still have a lagged supply response and hence very strong vanadium prices. Going forward I think the vanadium story will have parallels to the EV battery metals such as lithium and cobalt. That is, we will reach a peak vanadium price, followed by some pullback and consolidation, but still have a great decade ahead. The key is that if demand, especially from China, surprises on the upside as I expect, then we are quite likely to see a longer and higher average vanadium price, which will be beneficial to the vanadium producers and the vanadium developers looking to get funded. Perhaps soon we will be not just be talking about the 40 lithium-ion gigafactories, but also of a possible 40 vanadium redox flow megafactories.