Impact of China's new rebar standards About 85% of vanadium produced is used as a steel additive/alloy (ferrovanadium). However plain carbon steel, which is the most common and cheapest steel produced, doesn’t contain vanadium. Adding a small amount of alloy elements such as vanadium / niobium will increase the strength of steel considerably, and it is known as alloy steel. International standards require that high-strength grades of steel / rebars used in construction and infrastructure projects like bridges, skyscrapers, etc must contain the appropriate amount of alloy elements. High strength low alloy steel (HSLA) is renowned for its exceptional strength-to-weight ratio that can withstand seismic forces.
American and Western European steel producers have strict quality control measures in place to ensure that their products meet well-established industry standards and regulations. Consequently their alloy steel is generally known for its high quality / reliability.
China is the biggest steel producing country in the world with 54% of global steel production. China is also the largest steel exporter in the world thanks to the low prices of its steel products. However there have been concerns about the inferior quality / inconsistency of Chinese alloy steel due to lack of industry control / standards. In recent years China is trying to catch-up with the well-established steel industry standards and regulations of the Western world. The introduction of the 2018 and 2024 standards for high-strength steel / rebars are clear indications that China has made significant effort toward improving quality control while implementing stricter environmental regulations to reduce the country’s carbon footprint.
The Vanadium market is very small, with about 100,000 metric tons produced each year. If successfully implemented China’s 2024 quality rebar standards, coupled with increased vanadium consumption in long duration energy storage, would likely cause a Vanadium supply deficit in the near future. It will not be surprising at all to see a Vanadium recovery in Q4-24 that will accelerate in 2025.
DYODD