Vanadium prices have soared to their highest in nearly nine years due to shortages created by China's anti-pollution drive, which has meant the country importing the steel ingredient to meet its needs, traders said.

Prices of ferro vanadium -- used in steel alloys -- have risen nearly 90 percent this year to around $43 per kg, levels last seen in November 2008.

Vanadium pentoxide prices have more than doubled on the spot market in Europe to $9.5 per lb from $4.65 in early January.

Vanadium prices in China are higher than in Europe, making it lucrative for the country's producers to import the metal, traders said.

Ferro vanadium prices in China are hovering above $60 per kg. So, China is trying to buy the metal from Europe, especially Russia," a Stockholm-based trader said.

Chinese domestic prices for ferro-vanadium are quoted around $60-65/kg with exporters refusing to sell into the weaker European market, analysts at SP Angel said in a recent note.

Vanadium is used to strengthen steel and in a new generation of batteries, which advocates say have advantages over lithium batteries in terms of grid storage. "We may have 25 percent lower production this month from China. The market was already fairly tight ... So, output cuts in China mean the market will become even tighter," a London-based trader said.

Traders estimates global vanadium production last year at about 75,000 tonnes and consumption at 80,000 tonnes.

China and Russia dominate the vanadium market, with around 60 percent of global output. Most of the rest comes from South Africa, where it is produced directly from vanadium ore.

• [Editor:Wang Linyan]