Vanadium Market Trends: H1 2026 Review and Forecast

Vanadium supply still runs through China

Vanadium's supply picture remains as concentrated as ever.

As noted by the latest USGS data, China remains the top vanadium producer, with output of 82,000 metric tons of contained vanadium in 2025, about even with its 84,000 metric tons in 2024 but up significantly from 70,000 metric tons in 2023. As Chinese supply grows, total global mined supply increased from 104,000 metric tons in 2023 to 118,000 metric tons in 2024, but pulled back to 110,000 metric tons in 2025.

Environmental regulations, energy controls and long project timelines have restricted new capacity, leading to a year-over-year drop in global production. Most of this impact occurred in Sichuan's Panzhihua-Xichang vanadium-titanium belt, which is dominated by a few large integrated producers.

Additionally, low prices pushed Western and Chinese producers alike to curb output and shelve expansion plans.

Speaking with the Investing News Network at the Fastmarkets Global Battery and Critical Materials Conference in Las Vegas, Amy Bennett, principal consultant at Fastmarkets, offered a more tempered read on where the vanadium battery story stands.

For years, vanadium redox flow batteries (VRFBs) were pitched as the technology that would finally give vanadium a battery-metals growth story to rival lithium's.

Bennett isn't so sure that story is playing out as expected, at least outside China.

Much of the early enthusiasm for VRFBs coincided with a period when energy storage systems (ESS) leaned on NMC-type cathode chemistries, she said, but that's changed.

"We think that vanadium is actually starting to lose out in this conversation," Bennett said, pointing to the ESS sector's decisive shift toward LFP battery chemistry — itself dominant in Chinese battery manufacturing — as a headwind for flow batteries' cost case.

She added that VRFBs, once considered particularly well suited to extreme-temperature environments, have simply fallen out of the industry conversation: "We're just not hearing people talk about them so much anymore ... it is good to have these multiple chemistries, multiple options."

While VRFBs struggle to gain traction in the West’s battery storage segment, China is expanding its own vanadium-battery capacity.

Chinese producers have kept building out VRFB, or VFB, capacity through H1 2026, with Vanitec projecting that the country's cumulative installed capacity could exceed 8 gigawatt hours this year, consuming an estimated 35,000 to 40,000 metric tons of V2O5 equivalent, or about 19,600 to 22,400 metric tons of vanadium metal.

A wave of vanadium electrolyte production has accompanied that buildout, with planned project capacity across major Chinese producers — including Rongke Power, Hunan Yinfeng New Energy, Zhejiang Xingchen New Energy Technology and Jianlong Group — reportedly surpassing 4.5 million cubic meters annually as of May.

Broadly, as VRFBs are overshadowed in the Western investment narrative, China is scaling the technology at home.

Listen to the full interview to hear more from Fastmarkets' Amy Bennett on the vanadium landscape as well as her forecast for the graphite and anode material market.

Steel remains the market's anchor

Whatever happens with batteries, steel still does the heavy lifting for vanadium demand. The alloying segment accounts for close to 90 percent of vanadium's total market volume in 2026 by some industry estimates, and that isn't expected to change quickly.

That's part of why Bennett sees the broader energy storage narrative, and the AI-driven data-center power demand behind it, as more durable than some skeptics assume, even if vanadium's specific slice of it has narrowed.

"In the US, at least, we seem to be sort of almost running out of electricity," she said, arguing that even stripped of the AI buildout story, "there's sort of a structural industrial change happening within the US that will support the ESS business."

She pointed to broader Fastmarkets estimates that ESS demand could surpass EV battery demand by around 2030, a shift she called more dramatic and faster-moving than analysts anticipated even a few years ago.

Vanadium market outlook: A slow, supply-led recovery

Most forecasters, including CRU Group, still expect vanadium's turn to come later this year rather than sooner, as curtailed production runs into firmer demand from both steel and storage.

Analysts broadly expect the market to tip into a modest deficit by late 2026, which should support further price gains into 2027, though the timeline depends heavily on how quickly Chinese producers respond to better margins.

Ultimately, the sector faces a persistent challenge: promising demand narratives often outpace the actual rate of investment and development. Bridging this gap will require significantly faster alignment and commitment from both government and private capital than current efforts allow.