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The ferro-vanadium price took a major knock in Europe on Wednesday, as market participants reported pressure from poor consumer demand and the threat of new sanctions on Russia.
Ferro-vanadium basis 78% min, free delivered duty paid, consumer plant, 1st grade Western Europe, $ per kg V
Key drivers Traders reported a continuing lack of consumer demand. There are renewed concerns over sanctions imposed by the USA on Russian and Ukrainian entities.
A weaker rouble could encourage sellers in Russia to look to the west in order to pick up US currency, meaning lower prices for ferro-vanadium in dollars, while sellers continue to make profit in roubles.
A large sale of ferro-vanadium in northern Europe was reported at an extremely low price on August 4, and even smaller tonnages were fetching prices closer to the low end of the range.
Support provided by the news that troubled South African company Evraz Highveld is not producing vanadium slag for the time being has faded.
Key quotes “I thought [ferro-vanadium] was the one with the most potential to go up…but you can see further depreciation of the rouble, which makes life easier for exporters,” a trader said.
“As far as Russia is concerned, there’s uncertainty there. I would prefer to be optimistic because it’s a big sales market, but I think it’s going to deteriorate further,” he added.
Background Late in July, news emerged that the US department of the treasury’s office of foreign assets control had issued a Crimea Sanctions Advisory, as well as identifying certain subsidiaries of entities on the Sectoral Sanctions Identification List, and adding 19 Russian and Ukrainian individuals and entities to Specially Designated Nationals and Blocked Persons list.
Also in late July, ferro-vanadium prices edged higher as the market reacted to Evraz Highveld’s vanadium slag production stoppage.
Claire Hack chack@metalbulletin.com Twitter: @clairehack_mb