GLOBAL VANADIUM WRAP: China export prices cut to spark buying interest; EU profit-taking goes on

Date: Dec 12, 2018

Chinese exporters of ferro-vanadium and vanadium pentoxide (V2O5) have significantly cut offer prices to stir up some buying interest overseas, while European traders continued to take profits, applying further pressure on ferro-vanadium prices.

  • Chinese exporters slash offers to promote buying interest
  • Europe FeV market continues to suffer from profit-taking
  • Europe V2O5 market plummets following FeV downturn
  • US FeV prices slide at slower pace due to lack of liquidity

Chinese ferro-vanadium export prices dropped significantly in the pricing week ending on Thursday December 6, with Chinese traders slashing their offer prices in an attempt to promote sales after noticing a lack of buying interest from markets overseas. 

Fastmarkets’ price assessment for ferro-vanadium, fob China, fell to $103-108 per kg on Thursday, down 14.4% from $119-127.50 per kg a week ago and down 21.9% from the historical high of $130-140 per kg reached on October 18.

A Chinese ferro-alloy smelter, who had offered at a price above $120 per kg previously, lowered the offer price to $106-108 per kg in the past week.

“We don’t want to cut our price so much but we have no choice as overseas buyers are expecting a lower price now and if your offer is too high, they won’t even come to you to ask,” the smelter said.

Similarly, many other traders were heard to have shaved their offer prices to lure overseas buyers back into the Chinese export market, sources said.

Chinese traders have shown growing interest in exporting their on-hand material out of China since domestic spot prices became less favourable. The price difference between the Chinese and European ferro-vanadium markets has consistently narrowed amid a fast decline in the Chinese market.

The ferro-vanadium price in China’s domestic market has been softening continuously since early November, while Chinese steel mills showed little interest in restocking the material now that declining rebar prices have diminished profits, market participants said.

The domestic rebar price in east China underwent a month-on-month drop of 15.5% to 3,880-3,920 yuan ($566-571) per tonne on December 6, according to Fastmarkets data.

“Many mills had already stocked up a lot of [ferro-vanadium] before November to prepare for the expected increase in the rebar-making process ratio – as required by the new rebar policy – but since the implementation of the policy is not as stringent as previously expected, instead of procuring more, mills plan to consume their stocks,” a source told Fastmarkets.

China’s new rebar policy – effective from November 1 – requires the addition of 0.03-0.05% of vanadium for HRB400 and 0.05-0.08% for HRB500, which will result in a rise of around 200 yuan per tonne for mills’ production costs, Fastmarkets understands.

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