Bushveld Mineral

South African Output Cuts to Boost China's Vanadium-Nitrogen Exports

Rising Exports Driven by Lower South African Production and Strong US Demand

China’s vanadium-nitrogen exports are expected to see significant growth in 2025, primarily due to output cuts from a major South African producer, increasing demand from the US, and strong export interest from Chinese producers. Market participants anticipate a boost in global vanadium-nitrogen trade, benefiting China’s export numbers.

Impact of South African Output Cuts on Global Vanadium-Nitrogen Supply

South African vanadium-nitrogen production has been notably impacted by ongoing equipment maintenance at Bushveld Minerals Vametco plant. From mid-December to March 2025, the plant will operate at reduced capacity due to a cash shortage. In 2024, Bushveld’s production fell by 19%, amounting to 1,387 tonnes. This reduction in South African output is expected to continue in 2025, with the producer operating at low run rates due to negative profit margins. Consequently, China is positioned to capitalize on these cuts by increasing its exports.

Global vanadium-nitrogen alloy production is heavily concentrated in China and South Africa, with other countries lacking the necessary technology due to intellectual property restrictions. While European and US steel mills often prefer using ferro-vanadium (80% grade) over vanadium-nitrogen, China’s export increase in vanadium-nitrogen reflects changing dynamics in the alloy market.

Surge in China’s Vanadium-Nitrogen Exports and US Market Demand

China’s vanadium-nitrogen exports more than doubled in 2024, reaching 2,523 tonnes, up from 945 tonnes in 2023. This growth can be attributed to South Africa’s lower output and China’s expanded export activities. Notably, in December 2024, China’s vanadium-nitrogen exports surged five-fold to 377 tonnes, compared to just 67 tonnes a year earlier.

The US was the largest buyer of Chinese vanadium-nitrogen in 2024, importing 892 tonnes, more than double the 335 tonnes purchased in 2023. Canada also saw a dramatic increase in imports, with 323 tonnes imported, a more than five-fold rise from 60 tonnes in 2023. India’s demand also increased by 69%, reaching 317 tonnes in 2024. The US demand for vanadium-nitrogen is expected to continue to rise, as the US government, under President Trump, has pledged to boost domestic construction activities, which will likely increase the demand for steel alloys.

Export Prices and Market Dynamics

Chinese export prices for vanadium-nitrogen are currently in the range of $20.30 to $21 per kilogram, lower than European prices of $23.80 to $24.20 per kilogram. Chinese smelters are more inclined to sell to overseas markets to address domestic oversupply issues. In 2024, China produced 41,500 tonnes of vanadium-nitrogen, surpassing domestic steel mills' consumption of 34,800 tonnes. However, some alloy smelters reduced production from 2023 levels due to negative profit margins and weaker steel demand.