Vanadium Titanium Co., Ltd.: Vanadium Product Prices Decline, 2024 Net Profit Drops 73.03% YoY

On March 31, the stock price of Vanadium Titanium Co., Ltd. declined, closing at 2.83 yuan per share, down 2.08%.

On the evening of March 28, Vanadium Titanium Co., Ltd. released its 2024 annual report, which showed that in 2024, the company fully implemented the strategy of becoming the vanguard of Ansteel Group's "third pole" and accelerated the creation of a world-class professional leading demonstration enterprise. Facing a complex market situation, the company comprehensively promoted efficient coordination of sales, production, R&D, and finance, adhered to structural optimization and profit priority, and ensured balanced and stable production organization. During the reporting period, the company completed a cumulative production of vanadium products (calculated as V2O5) of 53,400 mt, up 7.27% YoY; titanium dioxide of 252,900 mt (including 26,900 mt of chloride titanium dioxide), up 0.76% YoY; and titanium slag of 181,800 mt, down 5.99% YoY. In 2024, the company achieved operating revenue of 13.209 billion yuan, a decrease of 1.171 billion yuan compared to the previous year, down 8.15% YoY; operating costs of 12.207 billion yuan, a decrease of 102 million yuan compared to the previous year, down 0.83% YoY; and operating gross profit of 1.002 billion yuan, a decrease of 1.069 billion yuan compared to the previous year, down 51.62% YoY, mainly due to the decline in vanadium product prices. The net profit attributable to shareholders of the listed company was 285 million yuan, a decrease of 772 million yuan compared to the previous year, down 73.03% YoY, mainly due to the decline in vanadium product prices during the reporting period.

Vanadium Titanium Co., Ltd. introduced in its annual report that the company's main businesses include vanadium, titanium, and electricity, with vanadium and titanium being the strategic focus of the company's development. The main businesses include the production, sales, R&D, and application development of vanadium products, titanium dioxide, and titanium slag. The main products include vanadium oxide, ferrovanadium, vanadium nitride alloy, vanadium aluminum alloy, vanadium electrolyte, titanium dioxide, and titanium slag. The company is one of the major vanadium producers in China and a major supplier of titanium raw materials, as well as an important producer of titanium slag, sulfuric acid method, and chloride method titanium dioxide in China.

Vanadium Titanium Co., Ltd. stated in its introduction to the overall situation of the vanadium industry: In 2024, China's vanadium industry continued to experience oversupply, with certain changes in the supply and demand structure. According to statistics from the National Vanadium Titanium Industry Alliance, China's vanadium production in 2024 was about 165,000 mt (calculated as V2O5, the same hereinafter), an increase of about 1.9% compared to 2023, with vanadium extraction from vanadium slag increasing by about 4.1%, while vanadium extraction from stone coal and secondary resources decreased by about 13.4%. According to the announcement of the National Bureau of Statistics (NBS), China's crude steel production in 2024 decreased by 1.7% YoY, especially rebar production, which decreased by 13.6% YoY, resulting in a reduction in vanadium consumption in steel. However, the installation volume of all-vanadium flow ESS projects increased significantly in 2024, corresponding to a substantial increase in actual vanadium demand. Overall, China's total vanadium demand in 2024 increased by about 4.2%. In addition, vanadium exports also showed an overall growth trend in 2024.

Regarding the industry landscape and future development trends, Vanadium Titanium Co., Ltd. stated: The company was selected by the State-owned Assets Supervision and Administration Commission of the State Council as a world-class professional leading demonstration enterprise and is one of the key enterprises in the Panxi Strategic Resource Innovation and Development Pilot Zone. Relying on independent innovation, the company has explored a path of comprehensive utilization of difficult-to-use, low-grade, and polymetallic vanadium-titanium magnetite, with its resource utilization technology level internationally leading. It has formed a batch of proprietary technologies with independent intellectual property rights that are internationally and domestically leading, such as vanadium nitride alloy production technology and Panzhihua high-calcium magnesium titanium slag molten salt chlorination. In the vanadium industry, about 70% of vanadium is used in rebar in the steel sector. With the implementation of national policies promoting the mandatory application of high-strength rebar and the need for continuous upgrading and optimization of steel performance in the high-quality development of the manufacturing industry, based on China's 1 billion mt crude steel scale, it is expected that there will still be some growth space for vanadium product demand in the steel sector by 2025. In the non-steel sector, the demand for vanadium in all-vanadium flow batteries and the aviation industry will see significant growth, with the new energy strategy driving the growth of vanadium demand for ESS; the rapid development of the global aviation industry and the implementation of domestic civil-military integration and large aircraft strategies will increase the demand for vanadium aluminum alloy; the prospects for non-steel vanadium use are promising. In terms of titanium slag, with the completion and operation of the company's 60,000 mt molten salt chlorination titanium dioxide project and the expansion project of high-end titanium and titanium alloy sponge titanium for Panzhihua Steel, it will effectively support the demand for titanium slag. In terms of titanium dioxide, with the further expansion of domestic titanium dioxide capacity, further release of production, further reduction of foreign production, and further reduction of capacity utilization rate, the titanium dioxide industry will continue to produce based on sales in 2025. In terms of demand, it is expected to be basically flat globally compared to 2024.

Vanadium Titanium Co., Ltd.'s 2025 business development plan is: to complete the production of vanadium products (calculated as V2O5) of 52,500 mt, sulfuric acid method titanium dioxide of 225,500 mt, chloride method titanium dioxide of 64,500 mt, and titanium slag of 192,000 mt; and strive to achieve operating revenue of 10.3 billion yuan.

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In 2024, affected by the overall weak downstream demand, the price center of vanadium shifted downward. On December 31, 2024, the average price of vanadium pentoxide (flake V2O5≥98%) was 73,500 yuan/mt, a decrease of 16,500 yuan/mt compared to the average price of 90,000 yuan/mt on December 29, 2023, a decline of 18.33%.