China stricter rebar standards to cause V prices to increase By implementing stricter quality standards for rebar on Sept 25 2024, China vows to optimize steel product mix by developing high-end special steel. As Vanadium is generally added to make high-end steel products, the implementation of the new quality rebar standards will definitely increase China’s consumption of Vanadium and consequently will push Vanadium prices upward.
Vanadium is mainly consumed by the steel industry. China is both the biggest producing country and the largest consumer of Vanadium. With 54% of global steel production China is also the biggest steel producing country in the world. China steel mills are known for their cheap substandard rebar products. In 2018 stricter standards for high-strength rebar in China led to a 10% Vanadium deficit and caused V2O5 prices to skyrocket from around US$5/lb to almost US$28/lb within a year. However the lack of inspections and enforcement measures have allowed substandard steel to continue unchecked in recent years. This factor coupled with the current construction / real estate crisis in China have led Vanadium supply to exceed demand despite the modest increase in Vanadium consumption in the energy sector since the last 3 years, thus causing V2O5 prices to drop back down to the current US$5/lb range.
DYODD