China’s export ferro-vanadium price fell for the second consecutive week in the latest assessment period as of Thursday March 5, further undermined by the weakening domestic and European markets.
Fastmarkets’ price assessment for ferro-vanadium, 78% V min, fob China stood at $27-29 per kg on Thursday March 5, down 3.4% from $28-30 per kg the previous week.
China’s domestic prices for vanadium products – including ferro-vanadium and vanadium nitrogen – declined in response to aggressive competition among alloy plants to secure orders from mills.
A sparse number of mills reportedly re-entered the market last week to buy some volumes of vanadium products to maintain normal production in March, market sources said.
That said, demand for vanadium alloy products evidently dipped compared to a month ago, so alloy plants cut their offer prices to attract business, resulting in a wide weakening in alloy prices, market participants said.
“The volume [mills] needed shrank significantly while supply is still abundant, therefore, it’s inevitable to see a price fall,” a Chinese vanadium nitrogen producer said.
“We seldom heard of any [vanadium nitrogen] producers halting production because it’s costly to do so,” the producer added. “We don’t think alloy prices could fall sharply either because the current production costs will prevent suppliers from slashing too much on offer prices.”
The declining market, however, dampened some ferro-vanadium producers’ interest in resuming production.
“We do not plan to restart operations for the moment because the market situation is quite discouraging and there’s almost no room for a profit margin against the current price,” a Chinese ferro-vanadium producer said.
In the upstream market, China’s export vanadium pentoxide (V2O5) price was stagnant amid limited liquidity.
Fastmarkets’ assessment for vanadium pentoxide, 98% V2O5 min, fob China was flat week on week at $6.10-6.20 per lb on Thursday March 5.
The Chinese domestic price of V2O5 was comparatively stable after suppliers were reluctant to compromise too much on offer prices.
“We offered at 94,500 yuan ($13,631) per tonne and haven’t achieved any solid deals at the price yet but we wouln’t cut offers,” a Chinese V2O5 supplier said. “Some buyers wanted to place orders at 94,000 yuan per tonne, but we refused. After all, we do not have much readily available stock and would rather wait for a while,” the supplier added.
Ssome domestic V2O5 producers held off from offering on the belief that alloy plants will return to the market for purchasing after securing orders from mills.
“We refrained from offering, though we received a lot of inquiries. This is because we don’t have much volume at hand in March due to output cuts, so there’s no need for hurried sales now,” a second Chinese V2O5 supplier said.
In Europe, meanwhile, vanadium prices were under pressure with both the alloy and pentoxide prices falling week on week.
Fastmarkets assessed the ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe price at $25.65-26.95 per kg on Friday March 6, down from the midweek assessment of $26-27 per kg, when it had moved down from $27.50-29.95 per kg.
Ferro-vanadium prices in Europe have been on a downtrend for the past two weeks on weakening demand for vanadium products and global uncertainty amid the coronavirus outbreak.
“There are few inquiries around but there are still no end-users in the market,” a supplier in Europe said. “With a lot of material in Rotterdam, they’re all waiting for prices to move even lower.”
“But with China’s consumption slowly restarting and orders in the pipeline, the downtrend won’t last much longer,” the supplier added.
Fastmarkets’ price assessment for vanadium pentoxide 98% V2O5 min, in-whs Rotterdam fell 6.2% to $5.80-7.10 per lb on Friday March 6, down from $6.50-7.25 per lb the previous week.
The price range widened while the spot market remained active last week, with 80 tonnes of concluded business reported to Fastmarkets during the pricing week.
“There is uncertainty in the market, with the full effects of the coronavirus slowdown still not fully realized, which is reflected in a wider range,” a trader in Europe said.