Veni, Vidi, Vanadium: The Key To Steel

May 26, 2009


Essentially, as an exceptionally versatile alloying element, using vanadium not only imparts to the steels strength, toughness and reliability, it also enables steel to be used effectively at extremes of both high and low temperature. In addition, where it is of vital importance, the strength-to-weight ratios of vanadium-containing steels can be of the highest order.

(As far back as the early 1900s, Henry Ford used the metal in his Model T Roadster, proudly proclaiming in a 1909 sales brochure for the car: "Nobody disputes that Vanadium steel is the finest automobile steel obtainable ...We defy any man to break a Ford Vanadium steel shaft or spring or axle with any test less than 50% more rigid than would be required to put any other steel in the junk pile ...")

The use of vanadium in trucks and automobiles is now just one of its many uses in the transport industry. Others include its use in:

  • The manufacturing process of synthetic rubber for hoses and seals
  • Airframes and aeroengines
  • Steel railway rails
  • Railway wagons
  • Sheet piling in, for example, docks
  • Ships' steel plates
  • Marine diesel engines


In the energy and engineering & building industries, vanadium is used, amongst other things, in:


Energy Engineering
- Steam drums and superheater tubes - Bridges and buildings
- Turbine castings, rotors, discs and blades - Cranes and drag lines
- Transmission towers and poles - Rolls in steel mills
- Oil and gas pipelines - Industrial compressor rotors
- Pipeline bends and valves - Hot formed pressure vessels
- Offshore platforms' legs - Tools and dies
- Oil storage tanks - Cutlery



The Dominant Players

Production of vanadium is concentrated in the hands of just a few public companies.

In South Africa, where around half of the vanadium recovered comes from vanadium ore, there are three major vanadium producers: Xstrata PLC (Bloomberg Ticker - XTA:LN), Highveld Steel and Vanadium Corporation Limited. Strategic Metals Corporation (Stratcor) (although this latter company's primary mine has remained closed since December 2008.)

In China, where practically all the vanadium comes from steel production, the two major vanadium producers are Panzhihua New Steel & Vanadium Co., Ltd (Pangang) (Bloomberg Ticker - 000629:CH) - the largest in China, and third largest in the world -- and Chengde Xinxin Vanadium and Titanium Stock Co., Ltd. (Bloomberg Ticker - 600357:CH).

In Russia, the leading player in the market is Russia's leading steelmaker, the Evraz Group (Bloomberg Ticker - EVR:LI).

The above spread of five vanadium-producing concerns belies the fact that Evraz is very much the leading, if not dominant, player in the market. Evraz not only owns Highveld in South Africa, but it also owns Strategic Metals Corporation (Stratcor), one of the largest vanadium product companies in the U.S.

Following Evraz's acquisition of Highveld, the European Commission, in an attempt to prevent Evraz from monopolizing the vanadium market, ruled that the group was obliged to separate off, and sell, various of Highveld's vanadium-related assets, including Vanchem, Highveld's vanadium division. Late in 2008, after a number of delays, Evraz eventually sold Vanchem to Swiss-based Duferco Investment Partners Inc, a consortium including Japanese investors and the steelmaker Duferco.

That said, even if one puts aside rumors circulating in early 2008 to the effect that, whilst under pressure from the EC over South Africa, Evraz was consolidating its position in Russia even further through some form of involvement in the acquisition of Tula Vanadium by SGMK-Metal, the group's position in the vanadium market remains exceptionally strong.

According to The TEX Report's general review of vanadium in 2008, published in February this year, the "total output of vanadium by Evraz in 2008 has been assumed to have shared 27-28% of the world market." However, if joint ventures were included the figures would be "... approximately 35% of the world demand for vanadium."

Interestingly, Evraz Group is effectively controlled (through his holding in Millhouse LLC) by Roman Abramovich, the Russian billionaire currently residing in London and the proud owner of the Chelsea Football Club.


Find your next ETF

Reset All