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General Market Commentary
New Chinese Rebar Standards Could Stoke Vanadium Demand
After rising 130 percent in 2017, vanadium prices could go even higher later this year due to rising demand.
New steel rebar regulations are set to come into force in China in November after being announced by the Standardization Administration of China (SAC) on February 6. The SAC also introduced a special action to cut down on substandard steels in the country.
China currently produces about 200 million MT of rebar annually, with typical vanadium content in Grade 3 rebar coming in at 0.3 kilograms per MT of steel.
Vanadium is used as a strengthening agent in steel, and China’s new rebar regulations are aimed at ensuring that newly built homes will be more resistant to earthquakes.
Market watchers told Metal Bulletin that rebar prices are likely to rise after the new regulations come into effect, as production costs will increase by $16 to $24 per tonne.
Ferrovanadium prices are currently trading between $58 and $60.50 per kilogram, with the market quiet ahead of Chinese New Year on Friday (February 16). Vanadium pentoxide ended the week of February 9 in a range of $13.10 to $13.50 per pound.
Vanitic, an international trade association that represents vanadium firms, has praised the SAC’s high-strength rebar standard, which eliminates low-strength Grade 2 (335MPa) rebar and authorizes three different high-strength standards: Grade 3 (400MPa), Grade 4 (500MPa) and Grade 5 (600MPa).
John Hilbert of Vanitec called the new standard a positive development towards the increased consumption of the metal. “Vanadium is the most common addition for high strength rebar, because it offers the best combination of high strength, good ductility, bendability, weldability, and reduced sensitivity to strain aging,” he said.