The following is a post from Blue swims on a AVL thread (we are...

The following is a post from Blue swims on a AVL thread (we are allowed to do this are we?).

It's a quality post and well worth keeping in mind


==========Well get ready because these prices are going to get REALLY ridiculous soon.And it’s mostly to do with vanadium and it’s relationship with iron.In how it’s found ,and in how it used.

And it goes like this; the worlds vanadium production last year was about 80,000t.(Vanitec)

And China’s production was about 43,000t - about 54% of world production.
This mostly came as a co- product of steel production. ( iron ore goes through a process called cintering taking off impurities such as trace vanadium before going in the blast furnaces.Highly polluting.
It’s refined further to be called pig iron- then to vanadium slag- then another roast/ leach process.)
Graph from Largo presentation 2018.

China also imported large amounts of pig iron and vanadium slag ( mostly from Russia) to process into vanadium products- this is now banned since dec 2017 as part of widespread environmental laws.
And processing of vanadium from the imported iron ore is now either banned or restricted to the few mills who conform to the strict standards. Most wont because it’s expensive and their focus is steel not vanadium.
And the twist is that because of the new environmental regulations, and an oversupply in world iron ore the Chinese producers want iron ore that is cleaner ie LOW VANADIUM IN IT.
BHP even proudly claim their iron ore is cleaner ie LOW VANADIUM IN IT
The profit margin for the Chinese steel producers is good ,about $160 per ton.With cleaner iron ore it’ll be even better.
From BHP’s latest presentation.
After the new rebar standards/ scrap bans I have a deficit of 37,000t of vanadium this year.
With rolling mill cutbacks and closures,ongoing slag bans, reduced secondary production,stone coal heavy restrictions and most importantly lack of new vanadium mine production there’s a crazy cycle about to happen here...