There has been a steep climb in vanadium prices over the last two years.
Prices have gone up by a factor of 10 during this period:
Source: Australian Vanadium
This trend could well be set to continue.
Not many people know what vanadium is or what it is used for.
Well, vanadium is a transition metal with a number of uses, including use as a means of producing steel alloys and cutting edge batteries.
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Vanadium’s use in batteries could increase its price
Below we see a pie chart which outlines what the metal is used for:
As you can see, a large portion is used for steel. In fact, 92% of vanadium consumption is tied to steel.
This is because steel dramatically increases the strength of steel by up to 100%, it also reduces its weight by up to 30%.
China has introduced new standards for its rebar, effectively doubling the vanadium used compared the rest of the world.
Perhaps the most exciting use of vanadium however, is in the production of Vanadium Redox Flow Batteries (VRFBs).
VRFBs provide a way of storing and re-supplying renewable energy. They have a very high capacity, are scalable, have a lifespan of 20 years, and are safer than lithium ion batteries.
Their usage is set to expand over the next eight years, growing into a $400 million dollar market, as projected in the graph below:
Source: Largo Resources
Big deposit of Vanadium recently found
Recently, there has been a significant finding of high-grade vanadium in Western Australia that could be used for domestic batteries as well as the Chinese steel market.
The basis of the finding is believed to involve 22.5 million pounds of vanadium and could be worth $3.33 billion over the course of the mine’s operation.
The company which owns the rights to the proposed mine is called Australian Vanadium Ltd [ASX:AVL].
Below, we see Australian Vanadium’s share price over the last year:
Of course, Markets & Money’s very own Jason Stevenson was talking about vanadium stocks all the way back in June of last year before the stock blew up.
Markets & Money will be following both the steel and battery elements of the story closely over the coming months.
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