GLOBAL VANADIUM WRAP: Tight supply continues to fuel global ferro-vanadium prices
Date: Jul 04, 2018
Vanadium prices resumed their rally in earnest last week after buyers paid higher prices to secure scarce units, with no signs of change to the persistent tight supply situation.
- Chinese export prices jump with spot units in limited supply amid persistent foreign inquiries
- European ferro-vanadium prices surge in the second half of the week after sellers hold firm with their offers
- Thin spot supply, strength in foreign markets fuel US ferro-vanadium prices
Prices for vanadium pentoxide (V2O5) from China showed particular strength over the past week, jumping to $16.70-17.65 per lb on Thursday June 28, an increase of 9.7% from the previous week’s assessed range of $14.80-16.50 per lb.
Buyers of the raw material have faced a protracted tight supply scenario over the past 18 months, but that has intensified over recent weeks
“Supply of V2O5 [in the physical market] is much tighter than ferro-vanadium after Jianlong Group started vanadium nitride production lines one month ago,” a vanadium pentoxide exporter said.
Offers were reported as high as $18 per lb on an fob China basis, and even as high as $19 per lb fob on June 30, though such levels had not yet been accepted by buyers.
Chinese export prices for ferro-vanadium also strengthened last week. Metal Bulletin’s price quotation for ferro-vanadium, fob China, rose to $72-78 per kg on June 28, up from $68-76 per kg in the prior week.
The export market saw more inquiries in the past two weeks, but supply in China continues to be tight and exporters have limited stocks.
“I sealed one deal at $72 and am offering $73 now,” one ferro-vanadium exporter said.
Several foreign sources reported offers for Chinese cargoes in a range $74-75 per kg this past week.
“I refused a bid of $78 as I cannot source a cargo for export at a competitive price in the domestic market,” a second exporter said, adding that he was quoting at $80 per kg.
European market participants reported particularly vibrant spot trade in Taiwan in the first half of the week, with local buyers unable to secure offers from sellers in Asia.
“They’re completely dry. They can’t get anything from Korea or China,” a producer source said.
European vanadium price rally quickens in second half of week
In Europe last week, price gains were more muted in the first few days of trading, though the rally gained pace in the second half of the week.
Metal Bulletin assessed ferro-vanadium prices at $73.50-75.60 per kg, delivered duty paid in Europe, on June 29, up from $72.40-73.50 per kg on June 22.
The market was assessed at $72.40-74 per kg on June 27, though sellers were already eying another rally and offering higher prices for their material.
“We’ve had a few requests from Europe and we’re expecting the business to go between $74 and $75,” a source at a distributor said on June 27.
“In terms of done deals it’s a little slow. People are pitching for the next level and logically that’s $75,” a trader added.
The cost of purchasing ferro-vanadium, the price of which is up as much as 190% compared with this time last year, is also contributing to delayed purchasing.
A price of a 20-tonne container of ferro-vanadium is nearing $1.5 million, and stretching buyer’s credit lines.
“People would like to buy more, but at $73 or $74 it’s very difficult,” a second trader source said.
Come the second half of the week, however, European trade was more active, after sellers declined to cut their offers and buyers began accepting higher prices to secure scarce units.
“We can’t offer any cheaper than $74 because we can’t replace below that,” the second trader added. “Mills need to buy in order to have stock in time for their reopening.”
“Anything over $70 is a great price, but in this bullish market I’m not under any pressure to sell,” the first producer said.
