How do Vanadium Traders Survive in 2019
www.ferroalloynet.com: Hello, Mr. Duan, thank you for taking time out of your busy schedule to accept the exclusive interview, please give us a brief introduction of your company’s operation.
Mr. Duan: Our company has been registered for more than 20 years, from the foundry industry in north China, to the regular alloy business of steel mills, and now to the vanadium and niobium alloy business of major special steel plants in China, both the quality and the number of customers have been greatly improved. At present, our company has an annual turnover of about 500 million and serves more than 20 steel mill customers, not only has a stable resource platform, but also a stable terminal customers.
www.ferroalloynet.com: How do you see the change of vanadium market in the first half of 2019?
Mr. Duan: Vanadium series continued to fall in the first half of the year, manufacturers lost more money and earned less. Price correction in June belongs to irrational speculation, just a flash in the pan.
www.ferroalloynet.com: The company is also engaged in vanadium-nitrogen alloy and Brazilian ferroniobium. From the perspective of customer demand changes, what impact do you think the competition between niobium and vanadium will have on the market in the second half of 2019?
Mr. Duan: Vanadium series and niobium series re complementary in the market and have common characteristics in performance. Terminal customers will determine the type and quantity of steel plant purchasing according to the material, element requirements, specifications and purchasing cost of their own products. It’s unrealistic for us to win-win, but we try to do our best.
www.ferroalloynet.com: As an indispensable part of the market, what are the main aspects of middlemen’s market adjustment?
Mr. Duan: Intermediate traders are neither raw material producers nor end users, as I said at the Wuhan Summit. Vanadium traders belong to the non-mainstream sequence, but they play an irreplaceable role in balancing and regulating the market. Whether the market is best-selling or unsalable, they all have their rationality. For example, during the period of 17 years’soaring price of vanadium series, it is difficult for the market to purchase vanadium, and there is no vanadium available for the production enterprises. In a very short period of time, we took advantage of the resources of our platform and quickly organized more than 300 tons of ferrovanadium to put into steel plants in the market, which solved the urgent need of our strategic cooperative customers and highlighted the regulative role played by traders in the market.
www.ferroalloynet.com: What do you think of the trend of vanadium price in the second half of 2019?
Mr. Duan: The price trend in the second half of 2019 depends on the balance between supply and demand. The overall supply of vanadium series (ferrovanadium, vanadium nitrogen alloy) should exceed demand. Without the impact of special policies, prices would stabilize within a reasonable range of CNY 165,000-180,000/t. But ultimately, the market decides the price!
www.ferroalloynet.com: Vanadium market is changing, and middlemen come and go. Do you have any suggestions for middlemen just entering the market?
Mr. Duan: Vanadium market is risky, so we need to be cautious in entering the market. We should have a good mentality, fully understand the market and conform to the market in order to seize the business opportunities in operating Vanadium market, just like stock market in China.
www.ferroalloynet.com: Does your company have any new development projects or plans in the future?
Mr. Duan: At present, we need to change the inherent business model and provide one-stop service to customers from raw material procurement – warehousing – terminal customers. The future company’s vision is: to do vanadium-niobium alloy business platform, establish industry brand, establish industry image, earn industry reputation. Relying on vanadium and nitrogen production enterprises and serving terminal customers of steel mills.
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