GLOBAL VANADIUM WRAP: European FeV market breaks through to new record highs

Date: Nov 21, 2018

Supply constraints continued to drive European ferro-vanadium and vanadium pentoxide prices to new heights, with both markets reaching record highs while the Chinese export market remained dormant.

  • Chinese export prices remain flat absent export activity
  • EU FeV prices set new record heights
  • EU V2O5 market edges upward to new record high
  • US FeV bolstered despite thin spot trading

China’s ferro-vanadium export price remained stable for the fifth consecutive week in the seven days to November 15, despite a slight recovery in buying interest from overseas market participants amid the further narrowing in the price spread between China’s domestic and export market.

Fastmarkets’ latest price assessment for ferro-vanadium, 78% minimum, fob China, was $130-140 per kg on Thursday, unchanged since October 18.

Although no export deals were concluded in the pricing week, Chinese ferro-vanadium traders have at last received inquiries from foreign buyers starting from this week, sources said.

“We received some inquiries from European buyers this week… but we haven’t given any [offers] so far,” a ferro-vanadium trader said on Thursday. “[But] we will have a discussion on how to offer later.”

The same trader told Fastmarkets the next day that the company planned to offer at $140 per kg for one inquiry.

And export offers have stayed comparatively firm amid the weakening signs in China’s domestic market.

China’s domestic ferro-vanadium market has showed signs of softening last week due to weak demand from steel mills, according to sources.

The ongoing implementation of the new rebar policy from November 1, which requires the use of more ferro-vanadium in the rebar manufacturing process, has failed to stimulate more buying activities in the first half of the month because some steelmakers initiated annual maintenance on their furnaces in early November, while others were said to have not executed the policy strictly.

“I heard that some mills had not increased their use of ferro-vanadium in the rebar-making process for the sake of saving costs, but I do not think this is a healthy way to develop as they might [lose] more once [that is] detected by the relevant watchdog,” a source said.

Meanwhile, Fastmarkets’ price assessment for vanadium pentoxide, min 98%, fob China, stood at $31-33 per lb on November 15, unchanged for the fourth consecutive week.

The export market for vanadium pentoxide remained quiet this week with no deals seen done. Meanwhile, the domestic vanadium pentoxide price moved down amid thin trading, Fastmarkets understands.

“We won’t buy a large volume of [vanadium pentoxide] for ferro-vanadium production now unless we secure orders from steel mills,” a ferro-alloy producer said. “The current price is still at a comparatively high level and we do not want our money to be trapped in a market full of uncertainty.”

The European ferro-vanadium market reached new heights last week, with prices at the highest levels ever recorded by Fastmarkets.

Spot prices for European ferro-vanadium strengthened to $126-128 per kg on November 16, up 1.5% from $124.25-126 per kg in the mid-week assessment, according to Fastmarkets.

Prices now reside at record highs according to Fastmarkets’ historical data going back to 1997, surpassing the previous record of $123-128 per kg set in April 2005.

Market activity was largely limited to less-than-a-truckload transactions once again, as both traders and consumers limited purchasing volumes to avoid too much exposure to the record high prices.

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