The vanadium market in 2025 has been shaped by two dominant forces: the slowdown in China’s construction sector and the growing, but still modest, role of vanadium redox batteries. As we look ahead to 2026, understanding these dynamics is critical for anticipating price movements and strategic opportunities.

Steel dependency and market fragilit

Vanadium demand remains heavily tied to steel production, accounting for roughly 80% of total consumption. China alone represents about  60% of global vanadium demand, with rebar making up the majority of that share. This means the health of China’s construction sector is the single most important factor for vanadium demand.

Over the past two to three years, China’s property market has weakened, decreasing construction activity and, in turn, vanadium consumption. While this trend has weighed on prices, any stabilisation in China’s construction sector could help support demand in 2026.

Energy storage: A growing but still modest player

While steel dominates, vanadium redox flow batteries (VFBs) still represent the growth component of the vanadium market. These batteries offer long-duration energy storage solutions, aligning with global energy transition goals.

However, their impact on demand remains small for now, and primarily concentrated in China. The pace of VRFB adoption will be a key trend to watch in 2026 in China and in the rest of the world.

Vanadium supply: Still adequate

The vanadium market remains adequately supplied despite the fact that South Africa's Vametco operations have stopped operating. Production in China can also be impacted by environmental regulations or operational issues at steel mills, but overall, we believe that the vanadium market will remain well supplied in 2026. Meanwhile, high inventories will keep the market into surplus.

Macro and geopolitical undercurrent

Beyond sector-specific factors, global macroeconomics and geopolitics are shaping the outlook for vanadium and ferroalloys. China’s economy remains unbalanced, with weak domestic demand and reliance on export-led manufacturing. Meanwhile, the USA’s economy is also slowing, raising questions about global growth trajectories for vanadium.

Geopolitical tensions add further complexity. Tariffs and trade restrictions could disrupt supply chains, while broader policy shifts, such as changes in interest rates or currency movements, may indirectly influence commodity markets.

Africa’s strategic role

Africa is becoming a focal point in the shifting global resource landscape for vanadium and ferroalloys. China continues to deepen its presence, sourcing critical raw materials and expanding exports of cars, machinery, and solar panels. This growing influence is reshaping trade flows and will have long-term implications for supply security and investment strategies.

Looking ahead to 2026:

• Construction recovery in China: Any stabilisation could support vanadium demand and prices.
• Scaling of VRFBs: Watch for technology adoption beyond China to diversify demand.
• Vanadium supply: New developments at Vametco, the impact of Evraz' Tula 2 new pentoxide plant and any changes in China's production.
• Global economic trends: Slowing growth in major economies will influence ferroalloys markets broadly.
• Geopolitical risks: Trade barriers and policy shifts remain key disruptors.
• Africa’s role: Continued Chinese investment will shape supply chains for critical materials.

While 2025 keeps underscoring the market's dependence on steel and China's economic health, the development of the VFB market in China and outside of China will remain the market's focus in 2026 and beyond, with additional uncertainty coming from geopolitics and trade issues.

Watch our full analysis for deeper insights into vanadium and ferroalloys market dynamics.

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