Vanadium’s price is at 13-year high. Where is it going next?

Date: Sep 25, 2018

Vanadium prices are now at their highest point since 2005, pushing through the magical $US20/lb mark on Friday amid ongoing supply concerns, according to Metal Bulletin data.

And with only three large scale primary vanadium producers globally – Bushveld Minerals, Glencore, and Largo Resources – this supply squeeze looks set to continue in the near term, even with planned expansions designed to increase annual production.

That’s good news for the 20-or so ASX stocks with exposure to vanadium.

Earlier this month investors piled into vanadium and oil shale play QEM which closed a $5 million initial public offer over-subscribed as it works towards an ASX listing.

But the big question for investors is whether the price is sustainable.

History shows us that vanadium prices are volatile, with pattern of long periods of low prices followed by a spike, then a fall.

In the first half of 2005 a spike in vanadium prices to over $25/lb — and subsequent drop — happened with such velocity that previous spikes seemed insignificant in comparison.

“Basically, right now the forecast is that there is going to be a large gap between supply and demand until new production come online,” says Technology Metals Australia boss Ian Prentice.

Technology Metals Australia (ASX:TMT) is progressing a final feasibility study on its Gabanintha project in WA.

Mr Prentice has just returned from a vanadium industry summit in China where the vanadium price was a hot topic.

“There is no near-term solution for that [vanadium supply] gap – demand is going to continue to grow.”

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