Ferro Vanadium Market size is forecast to reach around $3.8 billion by 2025, after growing at a CAGR of 5% during 2020-2025. Ferro Vanadium is a universal hardener, strengthener, and anti-corrosive additive, formed by the combination of iron and vanadium. Ferro vanadium is used in the manufacturing of rail steels, die steels, and heat resisting tool. Thus, the growing transportation sector and strong demand of ferrovanadium for manufacturing axles, body frames and crankshafts are likely xto boost the growth of the Ferro Vanadium market size during the forecast period. Whereas, the growing building and construction sector in emerging nations like China and India is also increasing the demand of ferrovanadium for concrete reinforcing bars, thus, further boosts the growth of this market. Additionally, the use of ferrovanadium in oil and gas pipelines also aid the growth of the market owing to the growing city gas distribution plants globally.
Ferro Vanadium Market Segment Analysis – By Chemical Type
FeV80 segment hold the largest share of more than 35% in the ferro vanadium market in 2019. Accelerating use FeV80 in steel industries due to the maximum vanadium content of 80% is driving the growth of the market. Increase in vanadium content not only increases the yield strength and tensile strength of steel, but also promote grain refinement. According to the Worldsteel Association, global crude steel output increased by 3.4% in 2019. Surging production of crude steel also raises the demand for ferro vanadium to enhance the strength, malleability and corrosion resistance of steel.
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Ferro Vanadium Market Segment Analysis – By Manufacturing Process
Based on the manufacturing process, aluminothermic reduction segment hold the largest share of more than 40% in the ferro vanadium market. Among the reduction methods, the aluminothermic process is most widely used due to it results in high product purity and good yield. In aluminothermic reduction process, a charge composed of vanadium pentoxide, aluminum, lime/fluorspar, scrap iron, and iron oxide is fed into a heated pot and ignited by a priming mixture. The vanadium and iron oxides are reduced in the resulting reaction, and molten ferrovanadium is obtained in the bottom of the pot. Cost effectiveness and relatively easy extraction of ferrovanadium are the major factors driving the growth of the Ferro vanadium by aluminothermic reduction.
Ferro Vanadium Market Segment Analysis – By Application
Axles segment hold the largest share of more than 25% in the ferro vanadium market in 2019. Axles are made up of hardened steel and addition of ferro vanadium enhances its properties. Ferro Vanadium reduces weight of the hardened steel while simultaneously increases the tensile strength of the material. Growing demand for electric and hybrid electric vehicles is escalating the use of hardened steel for the production of axles, subsequently raising the demand for ferro vanadium. According to International Energy Agency (IEA), global stock of electric passenger car increased by 63% reaching 5 million in 2018, this in turn rose the production of axles and fueled the growth of the ferro vanadium market. Furthermore, department of heavy industries had launched Faster Adoption and Manufacturing of (Hybrid &) Electric vehicle (FAME India) scheme which further increases the demand of axles to boost the properties of steel. Furthermore, Ferro vanadium not only lowers weight of the hardened steel but also increases the corrosion resistance of axles to alkaline reagents such as sulfuric and hydrochloric acids.
Ferro Vanadium Market Segment Analysis – By End Use Analysis
Based on the end-use industry, the building & construction segment hold the largest share of more than 25% in the ferro vanadium market in 2019. Ferro vanadium is extensively used in concrete reinforcing bars and structural plates to increase strength and corrosion resistance to alkaline reagents such as sulfuric and hydrochloric acids. The ability of ferro vanadium steels to withstand extreme load without being deformed make it a suitable material to use in beams and columns to provide structural support to the buildings. Moreover, increasing construction activities around the world is augmenting the growth of the market. According to the Institution of Civil Engineers (ICE), construction output will grow by 85% to $15.5 trillion worldwide by 2030, and three countries China, the US, and India will lead the way and account for 57% of all global growth.
Ferro Vanadium Market Segment Analysis – Geography
Asia Pacific dominated the ferro vanadium market with a share of more than 45% in 2019 followed by North America and Europe. The rapid industrial expansion and growing population is driving the growth of the ferro vanadium market in APAC region. Surging construction activities in emerging nations like China and India further boosts the growth of the market. For instance, the gross value added (GVA) by the construction sector increased from $183.5 billion in 2018-19 to $192 billion in 2019-20 in India. Furthermore, increase in crude steel production also escalates the demand for ferro vanadium to enhance its properties. According to Worldsteel Association, China’s crude steel production in 2019 was reached to 996.3 Mt, up by 8.3% on 2018 and its global share in crude steel production increased from 50.9% in 2018 to 53.3% in 2019. Indian government’s flagship scheme PMAY which aims to build 20 million urban homes and 30 million rural houses by 2022, also aids the growth of the market.
Ferro vanadium Market Drivers
Growing demand from oil & gas industries
The drilling, production, processing, storage, and transportation of oil & gas, inflicts huge stresses and corrosion on the steel. Acid-bearing fluids which are used during drilling operations corrode the tubing or pipes. Hence, to improve the corrosion resistance of steels to acids as well as alkali solutions, the demand for ferro vanadium is growing from oil industries. Flourishing oil & gas industries fuels the demand for ferro vanadium to enhance the strength of steel used in oil sector. For instance, according to the International Energy Agency (IEA), global oil demand is expected to rise by a total of 5.7 mb/d by 2025, with China and India accounting for about half of growth. Whereas, the growing cross-country pipeline and developing city gas distributions (CGD) sector drives the demand for pipes, which in turn propel the growth of this market. As, Vanadium-containing high-strength low -alloy steel (HSLA) is widely used for its strength and oil / gas pipelines.
Government policies and investments on infrastructures
Government’s focus on reforming and construction of infrastructures such as dams, highways and bridges are increasing the demand for steel which in turn drives the growth of ferro vanadium market. Ferrovanadium is an important alloy mainly is used for steelmaking to improve the hardness, strength, abrasion resistance, and ductility of steel. For instance, the New Steel Policy 2017, which is an effort of Indian government to steer the steel industry to achieve 300MT of steel-making capacity by 2030 is likely to aid the growth of market. Moreover, the Smart City Mission and Heritage City Development and Augmentation Yojana (HRIDAY) which aims to bring the most innovative construction technologies to India through a competitive platform also boost the use of ferrovanadium for high strength steel production. In addition, British government’s ENABLE Build Programme launched in 2019, provide financial support to the smaller house builders so that they can contribute to the infrastructure development of the nation. Furthermore, the projects such as California High Speed Rail and Boston Harbor Dredging Project also raises demand for steel, significantly fueling the growth of the ferro vanadium market.
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Ferro Vanadium Market Challenges
Increasing environmental concerns and volatile prices of raw material
High amount of carbon dioxide is emitted during the production of steel. According to World Steel Association, on an average 1.85 tons of CO2 were emitted for every ton of steel produced in 2018. Increasing global concerns due the harmful effect of carbon dioxide on ecosystem lowers the demand for steel, subsequently hampering the growth of the ferro vanadium market. Additionally, global iron ore supply deficit coupled with strong demand from China have driven iron ore prices. For instance, in 2017, in China, the iron ore price for 62% Fe CFR grew at the beginning of the year and reached around $90/MT by mid-March. Besides, in March 2018, Supreme Court banned all the mining activities in Goa (India), involving iron ore extraction. Thus, ban of mining operations also affects the growth of the ferro vanadium market.
Emergence of COVID-19
COVID-19 proved to be a major challenge for the ferro vanadium market. The outbreak of coronavirus has disrupted the supply chain and postponed the deliveries of steel and other raw materials from yards, due to lockdown and shortages of staff. Industries are shuttered all around the world. Decrease in purchasing capital of people has a direct impact on the automotive, construction and aviation industries, which in turn lowered the demand for steel and hampered the growth of the ferro vanadium market. According to data from Associated General Contractors of America (AGC), 40% of construction firms have had to lay-off staffs due to the Covid-19 outbreak. In addition, Society of India Automobile Manufacturers (SIAM), estimated that passenger vehicle sales declined by 51% to 143,014 units in March 2020 whereas the sales of commercial vehicles crashed 88% to 13,027 units.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the ferro vanadium market report. In 2019, the market of ferro vanadium has been consolidated by the top 10 companies accounting for xx% of the share. Major players in the ferro vanadium market are Atlantic Ltd., Hickman, Williams & Company, AMG Advanced Metallurgical Group N.V., Core Metals Group LLC, Bear Metallurgical Company, Jinzhou Guangda Ferroalloy Co., Ltd, Taiyo Koko Co., Ltd., Tremond Metals Corp., Gulf Chemical and Metallurgical Corporation, EVRAZ Vanadium, and Woojin Industry Co., Ltd., among others.
In May 2020, EVRAZ Vanadium has established a new Research and Development Center located in Group subsidiary East Metals AG, Zug, Switzerland. Its main objective is to support sustainable and diversified usage of vanadium as an alloying element in current and future steel products.
In September 2019, AMG Advanced Metallurgical Group N.V. has signed a long-term agreement to supply 100% of its available ferrovanadium production from both the existing and the future Ohio facilities to Glencore AG.
China’s new high-strength rebar standard is likely to aid the growth of the ferro vanadium market. The standard eliminates low strength Grade 2 rebar and sets out specifications for three different high strength standards: Grade 3 (400MPa), Grade 4 (500MPa), and Grade 5 (600MPa). These will require 0.03% V, 0.06% V, and more than 0.1% V respectively.
The U.S. Commerce Department has imposed duties of up to 141% on Chinese structural steel and up to 31% on Mexican structural steel. Thus, trade war between the U.S and China has impacted the growth of the ferro vanadium market.
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