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Our Must Have Stock of November

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On November 1st, a new law will be passed by the Chinese government called the GBT-1499, which some believe may result in an increased demand of a specific compound needed to strengthen steel. The demand of this additive is increasing and with the addition of the new guidelines by the Chinese government, you can expect this demand to increase.

Some investors believe that this new building code reinforcement will create an increased demand in this product as currently there is already a short supply. Currently this “additive” is costs about about $20/lb. However, with the new change in building code reinforcement, some experts believe that it will be trading 10-fold to upwards of $200/lb. This isn’t the first time we’ve seen such increased demand for this “additive”. Similar situation occurred a few years ago which saw the price skyrocket more than 800{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15}.

This metal has been known to steel workers for sometime. Henry Ford used it in 1908 to make the body of his Model T stronger and lighter. Interestingly, this metal’s history seemingly goes back even further. Indeed, mankind may have been unwittingly exploiting the metal as far back as the 3rd Century BC. It has been generally used to makes steel tools more resilient. Addition of this metal to steel makes it more durable in higher temperatures. Thus, it is used in drill bits, circular saws, engine turbines and other moving parts that generate a lot of heat. Hence, so far, steel accounts for perhaps 90{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15} of demand for the metal.

This metal has a very small and volatile market, which is why investors have seen increased 800{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15} or more in price in response to increase in demand. The biggest suppliers are China, Russia and South Africa. The biggest demand comes from China, which is currently undergoing what some call the biggest construction boom in history. Which is why the new building code reinforcement law is so important as it demands contractors to stop using low-quality steel rebar in exchange for high quality steel reinforced with this metal. This new law will most likely result in an 40{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15} increase in demand for this metal.

Another reason we are high on this metal and what makes it an attractive long-term investment is the future demand for its use in energy. Yet the biggest source of future demand may have nothing to do with steel at all, and may instead exploit vanadium’s unusual electrochemical nature.

What is this mystery metal and which are the best companies to invest in?

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Dr. Tiam Feridooni

Written by: Dr. Tiam Feridooni MD, PhD, BSc Dr. Feridooni, graduated from Dalhousie Medical School in May, 2018. Prior to enrolling in medical school, he completed his Bachelor of Science with Honours in 2010 in Biochemistry. He then obtained his PhD at Dalhousie University in Pharmacology in 2014, with a focus around regenerative medicine and stem cell transplantation. Dr. Feridooni has been published numerous high impact journals and has also co-authored a few books.

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