Chinese V2O5 Price Edges Down On Weak Sentiment While European Range Widens Upwards

Chinese vanadium pentoxide (V2O5) prices have resumed their decline as sentiment deteriorated on falling downstream vanadium nitrogen tender prices from major steel mills, while in Europe the price range widened upwards on increased spot activity.

Fastmarkets’ assessment for vanadium pentoxide, 98% V2O5 min, fob China, fell to $6.15-6.35 per lb on November 28, from $6.20-6.40 per lb previously.

The export window has remained closed on the vast negative arbitrage.

Mainstream domestic ex-works quotations for vanadium pentoxide were at 95,000-100,000 yuan ($13,511-13,938) per tonne, compared with around 97,000-100,000 yuan per tonne one week ago, market participants said. The prices were inclusive of China value-added tax (VAT), at bank acceptance basis.

The latest vanadium nitrogen tender prices for December delivery averaged approximately 145,000 yuan per tonne, China-VAT inclusive, at bank acceptance basis, compared with 170,000-180,000 yuan per tonne one month ago, Fastmarkets understands.

Some mills re-entered the market to restock last week but the lower-than-expected procurement prices have weighed on overall market sentiment, market participants said.

One mill was heard to have concluded some volume of vanadium nitrogen at 143,000 yuan per tonne, China-VAT inclusive, market participants said.

Some traders were also heard to bid so aggressively that many suppliers were reluctant to provide them with cargoes.

Market participants also pointed out that the decline in tender volumes indicated adequate alloy stocks at mills, who intended to delay procurement for lower prices.

“Steel mills have mostly cut their demand for the tender to about 20-30 tonnes when previously they purchased about 100 tonnes per cargo,” a Chinese trader said.

Meanwhile, the looming traditional stockpiling for operations during Chinese New Year (January 24-30) may revive demand and stabilize the market to some extent, market participants said.

“Steel mills are likely to stockpile materials for their operations during Chinese New Year holiday in late December,” a producer said. “We might see a peak in procurement then.”

In Europe, the V2O5 market edged higher last week to $4.80-6 per lb from $4.80-5.75 per lb previously amid increased spot liquidity. Some 30 tonnes were reported to Fastmarkets to have changed hands last week.

Some buyers reported difficulties in securing material at cheaper levels amid tightening prompt availability, while others successfully negotiated lower-priced deals.

Elsewhere, in the ferro-vanadium market, domestic Chinese market prices were broadly unchanged amid low liquidity, with domestic mills favoring vanadium nitrogen while overseas buyers muted their inquiries.

Fastmarkets’ assessment for ferro-vanadium, 78% V min, fob China, was unchanged at $28-30 per kg on November 28.

The European ferro-vanadium market was also unchanged amid quiet spot activity with the market’s attention focused on long-term negotiations, which are taking place later than usual this year, market sources said.

Fastmarkets’ price assessment for ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe, was $23-23.80 per kg on November 29, unchanged from the mid-week assessment, when prices were also unchanged. Prices in Europe have been unchanged for a second consecutive week.

Ferro-vanadium prices in Europe had been on a downtrend for most of the year after hitting an all-time high late last year, partly because of an anticipated increase in demand from the November 2018 implementation of new rebar manufacturing standards in China.

But the benchmark ferro-vanadium price in Europe has fallen by more than 60% since the start of the year after market participants realized that enforcement of the revised rebar policy was not as stringent as had been expected and because steel mills had increased their use of ferro-niobium to replace vanadium.

In the past three weeks, however, prices have started to move up after a large-tonnage consumer deal was concluded, lifting prices and sentiment.