GLOBAL VANADIUM WRAP: European FeV, V2O5 prices climb again, reaching fresh highs amid supply concerns

European ferro-vanadium and vanadium pentoxide (V2O5) prices climbed higher in the week ended Friday September 14 to reach more than 13-year highs amid supply concerns, while Chinese exporters held back offers to compensate for limited stocks.

  • Chinese export prices underpinned by strong domestic market
  • European FeV prices rise 5.5% week on week on supply concerns
  • European V2O5 prices edge up despite thin trading
  • US FeV market quiet, prices lag global market

China’s ferro-vanadium export price climbed last week against the backdrop of a strong domestic market and resumed buying interest from Europe following the traditional summer break.

Metal Bulletin’s price quotation for fob China ferro-vanadium min 78% rose to $85-88 per kg on September 13, up 6.8% from $80-82 per kg a week earlier.

“European buyers are coming back from holiday, and we have received more inquiries for the past one week,” a trader said.

At the same time, producers in China have been holding back from making offers in the export market due to limited availability of material stemming from tightened raw materials supply and strong domestic demand.

“We don’t have enough cargoes to sell as we don’t have enough raw materials to produce,” a producer told Metal Bulletin.

The Chinese government banned imports of vanadium scrap at the end of last year, which has tightened availability of the raw materials used in vanadium production.

“There are no stocks at all and the supply deficit is widening,” a second trader said.

Spot ferro-vanadium quotations in China’s domestic market climbed to as high as 290,000 yuan ($42,233) per tonne last week, compared with 280,000 yuan per tonne a week earlier, market sources told Metal Bulletin.

“Even domestic consumers couldn’t get enough units, let alone overseas buyers,” the producer said.

Metal Bulletin’s price quotation for fob China V2O5 edged up to $19-20 per Ib on September 13, from $18.50-19 per lb on September 6.

European FeV market strengthens further on persisting tight supply

In Europe, ferro-vanadium prices soared last week amid tight supply and a continued uptick in spot market interest.

Spot prices for ferro-vanadium rose to $93-96 per kg, delivered duty-paid in Europe, on September 14, according to Metal Bulletin’s latest assessment. This marked a 5.5% increase from $87-92.10 per kg during the midweek assessment.

European ferro-vanadium prices moved up quickly throughout last week, with prices now up 11.4% from $84.50-85.20 per kg on September 7.

Current price levels represent a more than 13-year peak for European ferro-vanadium, with prices now at their highest point since $93-98 per kg on June 13, 2005.

Supply concerns have served as the primary driver for the price surge, while traders have run inventories dry.

While consumers have been in the spot market, traders have served as the source for most of the spot market interest over the last week, as many have anxiously tried to buy back into the continuously rising market.

“If you aren’t sitting on stocks, which not many are, you don’t really have anywhere to go for material right now outside of a couple of big suppliers. It is truly very tight out there,” a supplier source explained.

Chinese exporters have not been actively offering material to European traders, keeping the market tight.

“The price rise is justified in that it’s not just a rise in one particular market. These prices have support all over the globe,” a second supplier source stated.

Market activity had slowed to a halt by the end of last week, with many opting to take a step back from the market to gain further clarity on the market direction.

“We have more or less stopped offering just to see where prices can settle in. Prices basically were moving up a few dollars a day, so we need to take a step back,” a third supplier source said.

In the European V2O5 market, prices edged upward over the past week, reaching a fresh more than 13-year high.

Metal Bulletin assessed European V2O5 prices at $19.50-20 per lb on September 14, up 50 cents on the low end of the range from $19-20 per lb a week earlier.

Prices have not reached current levels since prices sat at $19.5-20.5 on July 4, 2005.

While trading activity was thin over last week, market participants were seen actively shopping, with offering prices soaring well above currently assessed levels.

“Offering prices are all over the place right now with the surge in ferro-vanadium, so it’s tough to say where the market will shake out. Nothing has been done yet, but by next week the market could be showing much higher,” a supplier source explained.

Similar strength in the US market

In the United States, the ferro-vanadium market similarly strengthened last week despite market activity remaining limited over the period.

US spot prices for ferro-vanadium were assessed at $39.75-40.25 per lb on September 13, up 75 cents from $39-39.50 per lb in the prior week, according to American Metal Market.

While global prices have surged well above current US levels, a lack of liquidity in the US spot market has kept prices from experiencing a similar rise.

“Prices will be higher, but there just hasn’t really been anything happening in the US to spark prices to meet the rest of the world,” a US supplier source told AMM.

Offering prices have begun to show markedly higher, with market participants expecting the market to follow global prices upward next week.