Vanadium Market, LPV Asset Update

"Crystalized Vanadium. Close up." by Van Daniel is licensed under CC BY-NC-SA 2.0.

Vanadium prices increased +4.1% this month, with VRFBs poised to play a major role in demand growth in 2023.  As we noted in a previous article, there were several VRFB projects announced in February with significant plans in China.  New VRFB builds in China could total approximately 2 GWh in 2023, or 10% of global vanadium output.

According to Largo Physical Vanadium (LPV), these recent announcements from China indicate that VRFB manufacturing capacity of approximately 20 GWh could be in place within the next few years.  A significant milestone: from the advent of VRFBs in the 1980s to 2021 there have been approximately 400 MWhs of VRFBs installed worldwide.  The number of deployments over the past 40 years were doubled in 2022 alone, providing further confirmation that VRFBs are the right technology at the right time – as the world demands an energy transition.

Historical VRFB Deployment as % of Global Vanadium Consumption

Historically, VRFBs have accounted for approximately 1-2% of global vanadium consumption. By 2022, this number is estimated to be around 6%. Expectations are that VRBs share of global vanadium consumption will increase to 10% in 2023. Source: Visual Capitalist, Largo Physical Vanadium

A total of 400 MWhs of VRFB deployments were completed in 2022 alone, effectively doubling the number of deployments over the past 40 years in just one year. Estimates reveal that an additional 2 GWhs of VRFBs will be installed in 2023 – a 2.5x increase over historic installations.

VRFBs are responsible for a large share of global vanadium consumption than ever before.

The advent of VRFBs as a energy storage alternative is rapidly increasing its share to account for 10% of global vanadium consumption by 2023.  Outside of China, investments and government support is also growing as long duration energy storage is becoming a key priority towards decarbonization.

Demand from other key markets, including the steel, aerospace and chemical sectors, has also been stronger amid an increased inflationary environment. Specifically, after the lows of 2020 and 2021, aerospace demand has rebounded faster and stronger than expected and is expected to reach pre-COVID levels this year. According to market sources, this return of demand was not previously expected until 2025 or 2026.

LPV: Update 

LPV is the only ETF-like investment vehicle for vanadium.  Similar to the Sprott Uranium Trust, the company holds physical vanadium in storage and for use in VRFBs.  This gives investors unprecedented exposure to vanadium, whille providing protection from the volatility of the spot market.  LPV’s net assets are over 90% held in physical vanadium products and near-term delivery commitments.

LPV’s net asset value (“NAV”) is C$2.57/share, or 29% above the closing share price as of February 28th, 2023.

LPV commented on their recent performance:

We continue to believe this NAV to share price discount offers current and new LPV investors an even more attractive investment case. We are now in the midst of a marketing campaign to raise awareness of LPV and close the disconnect with our valuation.


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