About one month ago I published Quebec: Canada’s Next Generation of Vanadium Supply. I opened the article with:
“Vanadium may be the next clean energy metal gracing the headlines of mining magazines.”
On August 23rd Bloomberg published, It’s Party Time for the Metals No One Knows About. You guessed it; vanadium and rising vanadium prices was the metal of focus.
Vanadium Prices Continue March Higher
Investors have a way of following rising prices the way an astronomer follows a shooting star. One can’t help but watch, waiting for it to fade or disappear. The systematic and more recent parabolic rise of vanadium prices has investors buzzing.
While the above shows a rally from $16 per kg to over $22 per kg August 2016 through May 2017, in July prices really took off. Consequently, its price per pound highlights the more dramatic rise.
Like rare earth metals, there is very little vanadium produced in domestically friendly regions. In fact, I explained in late-July that,
“The top three producing nations exist in less than favorable political regions: South Africa, China, and Russia. For this reason, Vanadium mines located outside of these nations will always be in demand. First of all, the metals substitutability is low. That means for certain applications, only vanadium will do. Certainly, this fact alone makes it inherently strategic as other metals can not perform said function.”
Fundamentals Line Up for Vanadium Prices
So, while the price is on fire, the fundamentals support the re-rate. Julian Treger, the CEO of Anglo Pacific Group Plc, which owns vanadium royalties tends to agree. On August 23rd, he told Bloomberg that, “There are fundamental supply and demand issues that have driven the re-rating.” And, confirmed, “Prices could go higher.”
Like zinc, global commodity trader and producer Glencore has cut its production of vanadium by as much as 10% lately.
MiningWeekly.com reported the decline, “…owing to lower kiln availability and maintenance on their evaporation plant is good news for vanadium prices with the shortfall in production likely to continue to support higher vanadium prices for longer.”
While prices can always go higher, the clean energy revolution could take vanadium price a lot higher.
Difficult to Invest in Vanadium Directly
Here’s the catch.
“…while prices are soaring, there’s currently no easy way to invest directly in vanadium. The metal isn’t traded on any exchanges…” according to Bloomberg. So, while it is difficult to buy and invest in raw vanadium, explorers are drilling for the metal. In July, I predicted that,
“Vanadium is going to keep popping up in the headlines as battery makers look to secure a domestic resource.”
Furthermore,
“There are a handful of Canadian juniors in the space, but not many.”
China’s changing steel sector may require more vanadium. Bloomberg has reported, “The China Iron & Steel Research Institute has proposed increasing the amount of vanadium required in construction steel, which would boost consumption, according to VTB Capital and SP Angel research.”
The real demand for vanadium will come from the renewable energy sector, specifically battery storage.
“Vanadium-Flow Batteries are currently a spec of total vanadium demand, but every river starts with a single drop. Demand for metals related to renewable energy breakthroughs, including lithium and graphite have led to major interest.
In Vanadium-Flow Batteries: The Energy Storage Breakthrough We’ve Needed, Dr. James Conca an expert on energy, nuclear and dirty bombs, explains the relevance:
“V-flow batteries are fully containerized, nonflammable, compact, reusable over semi-infinite cycles, discharge 100% of the stored energy and do not degrade for more than 20 years.”
Furthermore,
“V-flow batteries use the multiple valence states of just vanadium to store and release charges.”
Click here to read Quebec: Canada’s Next Generation of Vanadium Supply.
Certainly, everything has improved for the vanadium sector in the past 12 months. Consequently, more investors will begin tracking this obscure metal primarily used in steel production. As interest and usage of vanadium for battery storage climbs so will vanadium prices and investor demand.
