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Uses

Vanadium is used to strengthen steel and titanium. About 85% of vanadium is used in the high performance steel industry. Steels can contain from 0.05% to 4% vanadium depending on the grade. World wide vanadium consumption is currently 65,000 tonnes per annum. The other main vanadium use is in titanium alloys, which generally contain about 5% vanadium to make them strong as well as light. About 10% of vanadium, in the form of high purity pentoxide, is converted into master alloys that are consumed in titanium alloy production.

Vanadium is used in materials that have important end uses including:

• automotive steels to make cars stronger, safer and yet lighter;
• structures - the Beijing Olympic Stadium used 45,000 tonnes of steel, and Wembley Stadium used 23,000 tonnes;
• reinforcing bar to strengthen concrete structures;
• passenger aircraft for its light weight to enhance fuel efficiency - the A380 and the B787 Dreamliner will be more than 10% titanium alloy by weight; and
  
• military equipment.

Demand

Steel consumption and titanium consumption are both expected to grow at more than 5% per annum due to the massive scale of urbanisation expected in several developing countries. However, vanadium consumption is estimated to grow at more than 7% due to increasing itensity of use in steel in those countries.

China, which accounts for nearly 40% of world steel production, is increasing its demand for steel grades that use vanadium. Intensity of use in Western countries averages about 0.05kg of vanadium per tonne of steel. Steel intensity of use in China is historically only about half of that. It is estimated that the intensity of use in China will reach the western average within five years.

Growth in the use of titanium alloys is also expected to increase vanadium consumption. The titanium content of aircraft is increasing with each generation. The soaring demand for new passenger aircraft, estimated by Boeing to an amount of 30,000 new aircraft by 2027, will drive titanium consumption and therefore vanadium demand.

Supply

Windimurra production is expected to meet about 7% of world demand, and it is expected global demand growth will require the equivalent of a "new Windimurra" to come on stream almost every year. Windimurra will also have the advantage of being one of the world's low cost vanadium producers.

Australian vanadium sold to consumers in the US is subject to a Free Trade Agreement while vanadium producers from China, South Africa and Russia are subject to anti-dumping duties of between 3.5% and 100%.