Hallgarten & Company forecasts vanadium prices to jump from US$9.50 per pound at the end of 2017 to $13.20/lb at the end of 2018, $15/lb at the end of 2019 and $18/lb at the end of 2020.
This was the first time Hallgarten & Co included vanadium, typically used for strengthening steel, in its metal analysis since 2010, with principal and mining strategist Christopher Ecclestone noting that it had been futile to talk about the metal in past years as no one was enthused about it until now."We feel that 2018 will be the year of the specialty metals and that vanadium is the metal to watch from this universe," he said.
Ecclestone noted that people had rarely paid attention to the metal, which is a by-product of the mining of other metals and of the petroleum refining industry, but it had been named at a number of events in 2017 as the next best thing "now that lithium has somewhat done its dash with promoters overcooking the soufflé".
Vanadium prices rocketed in the September 2017 quarter to around $12.50/lb, with Ecclestone citing a combination of perceptions of changing Chinese policies on vanadium content in steel alloys and its potential in electricity storage devices, such as the vanadium redox battery (VRB), which could see mass adoption from solar and wind generation.
He said both perceptions were justified, but the latter only in the long term, as there was no demand in the short-term, to "justify storming into vanadium (even for stockpiling) on the VRB potential because these batteries are currently using so little of the global supply".
However, he said the China story was "real, but reversible".
After the September quarter surge, the price retreated somewhat to $6.50/lb during the December quarter, but then rebounded to $9.50/lb, with Ecclestone noting that it remains 30% higher than the long-term average during this decade.
"We had warned at the time of the surge that any Chinese decision was revocable if prices went too high and that may have been the impetus for the decline. At current levels, though, there is no need for the Chinese to shift from their original decision to adopt a higher vanadium component in construction steels," he said.