GLOBAL VANADIUM WRAP: Prices rise across the board amid tight supply of V2O5

Consistent demand and limited supplies allowed ferro-vanadium and vanadium pentoxide prices to consolidate their recent gains in China, Europe and the United States last week.

  • Chinese exporters were inactive as the domestic market is profitable
  • Sellers hold out for higher prices in Europe as traders and consumers restock
  • US prices expected to rise further as stocks are depleted
Chinese vanadium products prices continued to rise amid tight availability of vanadium pentoxide although tenders for vanadium alloys from steel market are thin.

Metal Bulletin assessed fob China vanadium pentoxide prices at $8.90-9.20 per lb on Thursday November 16, up 4.0% week on week.

“Domestic supply of vanadium pentoxide is still tight and several major producers, such as Pangang Group, Jianlong Group and Shaanxi Wuzhou Mining, reduced production for different reasons, including high costs for extracting vanadium from stone coal or being short of vanadium titanium magnetite ore,” a large producer source said.

Closing prices of vanadium pentoxide have ranged 130,000-135,000 yuan per tonne in China, equivalent to $8.93-9.28 per lb fob China, while prices in Europe are still running under $8 per lb, meaning it is more profitable for vanadium pentoxide exporters to sell domestically.

Metal Bulletin’s assessment for spot ferro-vanadium prices was $40-42 per kg, fob China, on November 16, up 2.5% from the previous week following the upward pace of domestic vanadium pentoxide.

“Our offers are at least $40-41 [per kg] based on domestic closing prices, and some other exporters’ cost are $41-42 now,” a northeastern Chinese exporter said.

“Foreign buyers are hesitant to place orders at this range, but we do not intend to accept lower prices now,” a second exporter said.

European vanadium prices rose on consistent buying interest 
European ferro-vanadium prices consolidated their recent gains last week. Delivered duty-paid prices held stable at the midweek assessment of $40-41.50 per kg on Friday November 17, up from $37-40 per kg a week earlier.

A mix of trader and consumer buying has kept the spot market active and price gains underpinned, though offers at $42 per kg were yet to be accepted for any transactions of five tonnes or above.

“[End-users] fear the market will continue to move up, so they are trying to buy,” a European trader said.

A number of sellers reported that they would hold out for higher prices in the coming days, since material is not abundantly available before the year-end.

European vanadium pentoxide prices continued to rise with consistent buying interest over the past week.

Metal Bulletin’s price assessment for vanadium pentoxide rose to $7.50-7.80 per lb, in-warehouse Rotterdam on Friday, up from $6.80-7.50 per lb previously.
Conversion margins are appealing since oxide prices suffered greater declines than ferro-vanadium in recent weeks.

“It’s quite tempting to buy [vanadium pentoxide] at the moment. If I had any, I’d hold back from selling,” a second trader sad.

However, some buyers are reluctant to commit to vanadium pentoxide purchases, in light of the price volatility seen in 2017, because ferro-vanadium prices could be vastly different by the time oxide is converted to alloy.

“I’d rather buy ferro-vanadium today – it’s much quicker,” the first European trader source said.

Regional tightness buoys US FeV
The US ferro-vanadium market continued to run up last week, bolstered by strength in overseas markets and regional tightness. 

US spot prices for ferro-vanadium narrowed to $19.25-20 per lb on Thursday November 16, up 8.13% from $17.80-18.50 per lb previously, according to American Metal Market’s latest assessment.

Prices have jumped considerably for two consecutive weeks, now up 18.58% from $16.1-17 per lb on November 2.

As in Europe, the US vanadium market has been defined by volatility recently. The latest two-week run was preceded by a six-week downturn which saw prices down 23.5% from a peak of $21.25-22 per lb on September 21.

“Prices are suddenly approaching $20 [per lb], all on what is going in China and Europe where we are seeing a healthy increase in demand and activity,” a supplier source said.

While activity overseas is providing the backdrop for price strength, inventories are dwindling in the US, helping to cultivate the sharp price rise.

“We are getting that feeling that some people who had healthy inventories maybe no longer do,” a second supplier source said.

“Some of the inquiries that have been out would typically have received a lot more offers than they did this time around. It’s clear there’s not a lot of people with material right now,” a third supplier source said.

Furthermore, diminishing trade inventories have led to a spark in inter-trade purchasing interest.

“Some traders may have bailed out too early and are now trying to get back in,” the second supplier source added.

Given the lack of available supply in the US, market participants suspect prices may continue to run.

Moreover, prices will be especially susceptible to an uptick in demand or further strength overseas.

“The US is devoid of material at this point, so any demand shock in the market could make prices explode,” a fourth supplier source said.


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