Citic Metal Lifts Q4 Ferro-niobium Price Due To Yuan Depreciation

Citic Metal, the exclusive sales agent in China for ferro-niobium from Companhia Brasileira de Metalurgia e Mineração (CBMM), has raised its fourth-quarter price due to the significant volatility of the Chinese currency, market sources told Fastmarkets on Tuesday October 8.

After the latest adjustment, the company’s ferro-niobium price for its fourth-quarter contracts stands at around 205,000-225,000 yuan ($28,674-31,471) per tonne (equivalent to around $44-48 per kg) compared with around 190,000-220,000 yuan per tonne for third-quarter contracts, according to sources.

“The dollar price was heard to be relatively stable. The company has to raise its yuan-denominated price given the depreciating yuan, however,” a contact familiar with the issue told Fastmarkets.

The yuan was trading at 7.15 yuan to $1 on October 8, compared with 6.87 yuan to $1 at the end of June, according to exchange rate website

A weaker yuan means Chinese buyers have to pay more for dollar-denominated cargoes, Fastmarkets understands.

The depreciation of yuan has squeezed the profit margins of importers including Citic Metal and driven the increase in the fourth-quarter ferro-niobium price, market sources said.

Previously, some market participants were concerned the company would lower its price in the last quarter of the year to maintain its market share. Therefore, this price adjustment for ferro-niobium was welcomed by many in the market.

“This is quite good news for the whole vanadium market, because this means that vanadium products will keep their price competitiveness against ferro-niobium,” a Chinese market participant said.

“And in terms of this, I have reason to believe there would not be a big increase in imports for ferro-niobium in the fourth quarter,” the market participant added.

Fastmarkets’ assessment of the export price of ferro-vanadium, 78% V min, fob China, fell over the first three quarters to $35.50-38.50 per kg as of October 3, when the price was rolled over from the previous week due to the public holiday in China. The latest price assessment represents a decrease of 46.6% from $68.50-70.00 at the beginning of the year, Fastmarkets’ price archive showed.

China imported around 2,550 tonnes of ferro-niobium in August, down from about 2,937 tonnes in July, marking a drop for the fourth consecutive month, according to official but unconfirmed data seen by Fastmarkets.

The August volume also recorded a dip of 41% from approximately 4,320 tonnes over the corresponding period of 2018, the first year-on-year drop seen so far this year.

Over January-August, China’s imports for ferro-niobium totaled about 32,038 tonnes, an year-on-year increase of 49.9% from 21,378 tonnes.