Toronto, Ontario-based Largo Resources Ltd. announced its support for the new rebar standard announced on February 9, 2018 by the Standardization Administration for the People's Republic of China. This announcement also includes a special action to cut down on the use of all substandard steels in China. The new rebar standard and related action is expected to be implemented by November 2018.
Mark Smith, CEO of Largo stated: "The revised rebar standard will enhance the quality of rebar being used in China, which will in-turn allow China to build earthquake resistant homes and industrial capacity in the most efficient manner in terms of energy and raw material consumption and pollution generation. High strength low alloy vanadium steels are the most efficient material available for the development of the infrastructure necessary in order to create economic opportunity for the approximately two thirds of the earth's population living in developing economies."
According to a press release from Largo, China currently produces approximately 200 million metric tons of rebar per year. Typical vanadium content in grade 3 rebar is 0.3 kilograms of vanadium per metric ton of steel, and the release said that while it is difficult to quantify the impact of the new standard in the short term, the target for the Chinese steel industry is to produce 70 percent of this rebar to meet the grade 3 standard.
Reported in a recent Bloomberg article, analysts at BMO Capital Markets note that while vanadium had an exceptional past year as prices soared by more 130 percent due to tightened supply, stricter steel regulations in China and strong orders from the steel industry, there is still opportunity for additional uses of the metal in the form of industrial-scale batteries.
"As the only pure-play producer of vanadium, Largo is directly exposed to the increase in vanadium price and is poised to benefit greatly as a result," says Mark Smith.
Vanadium is widely known as a steel alloy metal where a small portion of the metal is added to steel making it stronger and lighter. However, with governments committing additional resources to fund substantial large-scale green energy projects, the use of vanadium in industrial size batteries has caused analysts to forecast increased demand of the metal which could cause further supply crunches and additional increases in the price of vanadium.
Vanadium is used in many industries and applications, from automobiles, power generation, and hand tools, to ships, industrial tools, airplanes and, increasingly in energy storage. The vanadium redox flow battery is a type of rechargeable flow battery that uses vanadium ions in different oxidation states to store chemical potential energy.
More than 70 percent of the world's supply of vanadium is based on production of vanadium from slag generated in Russia and China in the production of steel from vanadium titanium magnetite.