Demand for vanadium from China's non-steel industries is likely to rise in 2023, as decarbonisation and the development of China's aerospace industry fuel investment in aerospace titanium alloys and vanadium redox flow batteries (VRFBs).
Steel still accounts for about 90pc of global vanadium consumption, of which China is a major driver. Of the remainder, 9pc goes towards the manufacture of aerospace titanium alloy and chemical catalysts and 1pc goes into VRFBs.
High-end titanium alloys have become one of the main structural materials of aircraft and engines in the aviation field. And civil aircraft are gradually increasing their use of titanium alloys in order to reduce the weight of aircraft, increase carrying capacity and cut fuel consumption.
The commercialisation of C919, China's first self-developed airliner, has further encouraged the use of titanium alloys. Titanium alloys account for 9.3pc of the total weight of the C919, whose fuselage is about 42.1t. As a result, a single C919 aircraft is estimated to contain 3.92t of titanium alloy. Considering the yield rate of aerial titanium alloy parts, demand for titanium alloy from a single C919 aircraft will reach 49.0t, based on a yield rate of 8pc.
Demand for titanium alloys — and therefore vanadium — will continue to rise in the coming year amid an increase in C919 orders and deliveries. The airline's manufacturer, Commercial Aircraft Corporation of China, received 300 new orders for C919s at the 14th China International Aviation and Aerospace Exhibition on 8 November, lifting its total orders to 1,115 to date.
China's titanium alloy industry consumed 2,548t of vanadium pentoxide (V2O5) equivalent in 2021, up by 54pc from 1,654t of V2O5 equivalent in 2020, according to data from market participants.
Meanwhile, demand for vanadium from China's VRFB industry is also expected to rise in 2023 as decarbonisation initiatives spur greater investment in energy storage projects. VRFBs are widely seen as a key element of China's plan to hit peak carbon emissions by 2030 and then carbon neutrality by 2060, according to market participants.
Some Chinese VRFB projects have already been delivered for use this year, including a 100MW/400MWh vanadium flow battery system — the largest of its kind in the world — which was put into operation on 3 November in Dalian city, Liaoning province, to increase the efficiency of green electricity and maintain grid stability.
China's aim to accelerate a transition to lower-energy consumption and stimulate demand for renewable energy and energy storage products during its 14th five-year economic plan for 2021-25 has prompted many companies to develop VRFB projects.
Privately owned vanadium producer Heilongjiang Jianlong Iron and Steel in May 2022 signed a strategic co-operation agreement with China Vanadium Union (Beijing) Science and Technology Development to build the first VRFB energy storage demonstration base in China.
Major Chinese titanium and vanadium producer Pangang Group Vanadium/Titanium Resources will form a joint venture with leading VRFB energy storage system service provider Dalian Rongke Power to develop VRFB power storage projects.
On 9 September, construction on private-sector Hangzhou Heda Energy's 0.5MW/2MWh VRFB energy storage system officially started in Hangzhou Medical Port Hexiang Science and Technology Centre Park. And on 20 September, construction began on a 250MW/1GWh VRFB energy storage project in Yili city in northwest China's Xinjiang province.
Chengde Xinxin Vanadium Titanium and Beijing Dadi Yuan Tong Group on 7 December signed a purchase agreement for a 25MW (4H)/100MWh VRFB system that is used for the electrochemical energy storage-supporting supplement project of pumped storage power station built by Dadi Yuan Tong.
China's vanadium demand from the VRFB industry is likely to reach at least 9,100t of V2O5 equivalent in 2022, up by 88pc from 4,846t of V2O5 equivalent in 2021 and up by 219pc from 2,857t of V2O5 equivalent in 2020.
