Investing in vanadium stocks is a good idea with this new-popular element “Vanadium” (chemical symbol V) is a relatively rare metal that has one predominant use – a strengthening additive in steel and some forms of iron. According to the US Geological Survey (USGS) (2007), of the approximate 59,100 tonnes of vanadium produced in 2007, about 85% of this metal is used as a steel additive (Moskalyk and Alfantazi, Minerals Engineering, v16, 2003). In their 2008 update, the USGS notes that 93% of US consumption of V is metallurgical, including steel, iron and titanium alloys.
Of the balance of material, the remainder is largely used in catalysts (in the form of vanadium pentoxide, V2O5, in the manufacture of sulfuric acid, or as an oxidizer in the manufacture of maleic anhydride), and ceramics (V2O5 is a widely used material in ceramic production). There are also a horde of minor uses, as one would typically find for any metal.
It is worth investing in vanadium and noting that for many different types of steels, ferro niobium can be substituted for ferro vanadium, but a vanadium stocks have much more chance of being a power house in the next few years. However, the substitution is only economic at very high vanadium prices. It should also be noted that the amount of V used in steels is small, therefore the price of V must increase substantially to allow for substitution. For example, typical high-carbon steel containing vanadium as a hardener would have no more than 0.25% V content by weight, while ultra-hard tool steels like those used in high-speed machining would contain no more than 5% V by weight, and typically much less (down to perhaps 1%).
Due to relatively low levels of annual production, we believe that the vanadium market can only follow two possible paths. One is the boom-to-bust price gyrations of the past, assuming new suppliers do not enter the market, and the other is a much more stable pricing curve assuming new suppliers do enter the market, helping to stabilize the spread between supply and demand.
We do believe there are several drivers that could have a significant impact on V demand in coming years for vanadium companies. One is the use of lithium vanadium phosphate or fluorophosphate cathodes and lithium vanadium oxide anodes in rechargeable lithium batteries. These batteries exhibit much improved safety compared to the more generic lithium cobalt oxide-type cathodes seen in cellular telephone
or laptop batteries, which have higher operating voltages and higher rates of energy storage. Another is the use of vanadium in large-scale rechargeable batteries, called vanadium redox cells. The last is the use of vanadium as an anti-corrosion agent in some rare-earth magnets, enabling use of a new set of materials for use in strong magnets.
