GLOBAL VANADIUM WRAP: Rally resumes as supply limitations show no signs of easing in 2018

Date: Jan 09, 2018

Vanadium pentoxide (V2O5) and ferro-vanadium prices had a strong start to 2018 last week, with supply concerns in focus as the markets came back from the Christmas break.

  • Chinese V2O5 prices soar with upstream constraints in focus
  • Ferro-vanadium leads the way in Europe
  • US ferro-vanadium prices higher but spot activity ‘just getting started’

Vanadium prices in China jumped last week amid limited supply and rising purchasing interest ahead of the Chinese New Year (February 15-21).

Ferro-vanadium prices were assessed at $48-50 per kg, fob China on Thursday January 4, an increase of 8.9% week on week.

Demand within China also increased with steel mills looking to restock before it becomes difficult to secure deliveries around the Chinese New Year holidays.

“Though the Chinese New Year holiday break is only one week, some smelters will take maintenance during that period or prolong breaks as a reward for their workers, and more importantly, the inadequate transportation capacity around the break usually lasts one month, so consumers will replenish raw materials in advance,” a market source reported.

Price gains for V2O5 were more pronounced, reflecting the tightness stemming from China’s upstream supplies.

Metal Bulletin assessed fob China V2O5 prices at $11.60-12 per lb on Thursday, a sharp increase of 20.4% from the previous week.

“Domestic supply of V2O5 continues to be tight since output is limited, and demand for downstream ferro-vanadium and vanadium nitride has increased as steel mills started to restock ahead of the Chinese New Year holidays,” a second source said.

In addition, V2O5 smelters who usually consume imported vanadium slag have lowered their operation rates as a result of the ban on slag imports, market sources told Metal Bulletin.

Some Chinese V2O5 exporters did not quote in the export market given the lower prices in the international market.

“The closing prices here were around 170,000-180,000 yuan per tonne (equivalent to $11.80-12.60 per Ib) last week, but [last] Monday, it rose to 180,000-190,000 yuan supported by the bullish sentiment, so suppliers prefer to sell in domestic market,” a second source said.

Ferro-vanadium prices jump in Europe

In Europe, the price increase for V2O5 last week was less pronounced, with markedly lower interest in the raw material, compared with ferro-vanadium.

Metal Bulletin’s price assessment for V2O5 increased by 3.1% to $9.90-10.20 per lb, in-warehouse Rotterdam, on Friday.

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