The new rebar standard must be strictly adhered to
The 2018 rebar standards not only set out specifications for high strength steels but also banned the common practice among steelmakers of strengthening their rebars via water quenching (a process causing corrosion) as an alternative to adding more vanadium or other alloy elements.
Back in 2018 Fastmarkets reported that “if China’s 2018 rebar policy was strictly adhered throughout the domestic industry, this would generate around 2,000 tonnes of vanadium demand per month.” Imagine an increase in demand equivalent to about 24% of the global V production per year. Imagine a V supply deficit in China even with the current construction / real estate crisis. So how come China V2O5 prices are now at record low of around US$5/lb? Why have China 2018 rebar standards failed to lend continued support to vanadium prices? One of the key answers is the lack of strict enforcement by the steel industry and governmental regulators. For instance the cheap practice of strengthening steel rebars via water-quenching is still prevalent in China especially among small steelmakers.
If the new 2014 quality standard comes with rigorous enforcement and harsh penalties for non-compliance then do expect a healthy vanadium recovery.
“The new standard is a mandatory standard that must be implemented. Production enterprises should familiarize themselves with the changes in the standard and adjust production processes before the standard is implemented. Considering the inventory digestion cycle, old standard rebar products accumulated by distributors after the implementation of the standard cannot be sold.”