And so it begins...., page-34

I might correct this part of your post, which is very good btw:

You said
"As Scarpa and our China bears have pointed out, a huge breakout again of V demand due to the increased rebar standards is probably not going to occur."

My view
My point is the new rebar standards will increase vanadium demand, but China will use its 'buying power', as per my post, to ensure it doesn't significantly translate to long term sustained increases in the vanadium price and that is why I think prices will average US$10 to US$15 per pound long term.

For vanadium prices to be above this long term average more demand must come from outside China (and that will then provide the basis for the Chinese to stop playing games in seeking to control commodity prices through their purchasing power and the fact a lot of their industry, such as steel, is State owned and therefore can wear losses in the stare down stakes between sellers of commodities and China). If there are alternate buyers of vanadium outside China, well China's control of markets is reduced because the Chinese (partially to fully govt owned) industries, while they can bear losses for a while, can't bear them forever when China seeks to flex its muscle in commodity markets with the intention of controlling prices.

Commodity sellers need to think about the broader strategy of selling outside China to underpin price growth. China on the other hand is seeing this coming hence why they are starting to buy up certain producing mines, or have stakes in them too, particularly lithium for example (which is a second based policy to control prices of commodities).

As a low cost producer, I still think AVL will do very very well with a US$10 per pound to US$15 per pound vanadium price hence why I believe AVL just getting yourself into the vanadium market supplying steel is the priority here. I agree with you that VRB offer more of an opportunity for longer term price growth above that level but for that to occur China would need to be stopped from buying offshore vanadium mines and a greater proportion of demand and production of VRB's need to be outside China as well.

In terms of AVL, 99.5% electrolyte production can either be through a bolt on facility at mine site or simply it be produced closer to Perth. In other words, producing min grade 98% V205 is the priority here supplying the steel market as the vehicle to market entry (and whilst not as sexy as VRBs it is what is going to get the mine into production by 2021). But the longer term strategy is to supply more broadly and ensuring buyers are also outside China (and note this post/basis is relevant for all commodities and not just limiting the theory to vanadium in ters of what is required for sustaining price growth)

All IMO