| VRFBs set to dominate vanadium demand growth in 2023. The announcement of several large VRFB projects, particularly in China this month, (see News below), further support our high expectations for this industry to transform the vanadium market over the coming months and years. As noted in our previous market update, new VRFB deployments in China could total around 2 GWh in 2023 or 10% of global vanadium output. Moreover, recent announcements from China indicate that VRFB manufacturing capacity of approximately 20 GWh could be in place within the next few years. To put this into perspective, from the advent of the VRFB in the 1980s to the end of 2021, there have been approximately 400 MWhs of VRFBs installed around the globe. A total of 400 MWhs of VRFB deployments were completed in 2022 alone, effectively doubling the number of deployments over the past 40 years in just one year.More importantly, it is estimated that another 2 GWh of VRFBs will be installed in 2023, a 2.5x increase over historic installations. Historically, VRFBs have accounted for approximately 1-2% of global vanadium consumption. By 2022, this number is estimated to be around 6%. In 2023 alone, it could represent almost 10% of global vanadium consumption. Outside of China, investments and government support is also growing as long duration energy storage is becoming a key priority towards decarbonization. Demand from other key markets, including the steel, aerospace and chemical sectors, has also been stronger amid an increased inflationary environment. Specifically, after the lows of 2020 and 2021, aerospace demand has rebounded faster and stronger than expected and is expected to reach pre-COVID levels this year. According to market sources, this return of demand was not previously expected until 2025 or 2026.
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