GLOBAL VANADIUM WRAP: China’s Ferro-Vanadium Price Tumbles 11%; V2O5 Tracks Downtrend

The global vanadium market remained under pressure last week from poor buying interest and good spot availability.

The export price of ferro-vanadium in China plunged in the latest assessment period on Thursday October 31 following a significant price drop in the domestic market.

Fastmarkets assessed the price of ferro-vanadium, 78% V min, fob China at $29-31 per kg on October 31, down by 11.1% from $32.50-35 per kg a week earlier. The price has dropped by 18.9% since October 3, when it was assessed at $35.50-38.50 per kg.

Inquiries from abroad were scant due to weak demand there as well as the falling Chinese price – foreign buyers usually do not place orders from China while the price there is declining, market sources said.

“We only received one inquiry from Europe but that was for fixing the price of a long-term contract for the total volume in the whole of 2020,” a Chinese ferro-vanadium exporter told Fastmarkets on October 31. “Who knows what will happen in the next year? I believe no one dares to take the risks amid so many uncertainties.”

“After all, the volume, which is less than 200 tonnes, is not appealing enough compared to possible risks,” he added. “We declined it without any hesitation.”

Exacerbating the downward pressure on the Chinese ferro-vanadium export price last week was the sliding domestic alloy price. Chinese domestic vanadium product prices tumbled after some alloy smelters caved in to relatively low tender prices from mills.

“Bid prices from mills left limited room for profit margins for alloy plants and some of them even have already suffered losses. But had no choice but to accept [the low prices] because they need to destock and generate cash,” a Chinese market participant said.

Some domestic ferro-vanadium producers have already chosen to suspend production in response to persistently weak demand and the declining price at home, according to market sources.

“We have stopped production and whether and when to restart will depend on the actual demand and price,” a Chinese ferro-vanadium producer said.

On the upstream side, China’s export price of vanadium pentoxide (V2O5) also dipped, tracking the trend in the domestic market.

Fastmarkets assessed the price for vanadium pentoxide, 98% V2O5 min, fob China at $6.30-6.40 per lb on October 31, down by 14.2% from $7.20-7.60 per lb in the previous week.

The Chinese domestic V2O5 price plummeted in response to the significant fall in prices from the country’s major V2O5 suppliers. China’s major V2O5 suppliers announced lower long-term contract prices of around 100,000 yuan ($14,216) per tonne last week, compared with around 130,000 yuan per tonne previously, according to market sources.

“We will not consider restocking any volume of V2O5 now because the current market situation is not clear at all. It seems that the price will continue to fall in the coming weeks and we are not sure whether it will drop to the level seen a few years ago. Waiting and watching is a safer move,” a second Chinese ferro-vanadium producer said.

European FeV weakens again; V2O5 unchanged
The European ferro-vanadium market fell again last week, with Fastmarkets assessing the price for ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe at $20.50-21 per kg on November 1. While this is unchanged from the mid-week assessment on October 31, it is down by 2.6% from $20.50-22.10 per kg on October 25 and continues to trade at its lowest since September 2016.

“We are getting close to breakeven costs right now but for now it’s still hard to find material below $20 per kg,” a trader in Europe said.

The spot market was relatively quiet last week with market’s attention now turning to long-term contract negotiations, market participants said.

Meanwhile, the European V2O5 market was unchanged last week amid lackluster spot demand.

Fastmarkets’ price assessment for vanadium pentoxide 98% V2O5 min, in-whs Rotterdam was unchanged week on week at $4.45-5 per lb on November 1, following four consecutive weekly declines.

US ferro-vanadium price flirting with 3-year low
The US ferro-vanadium market continued its downward spiral this past week, falling to near three-year lows amid continued pressure from weakness in global markets.

Fastmarkets assessed the price for ferro-vanadium 70-80% V, in-whs Pittsburgh at $10.50-11 per lb on October 31, a decline of 12.2% from $12-12.50 per lb a week earlier.

The US market has now experienced three consecutive noteworthy declines, with prices now down 23.9% from $13.75-14.50 per lb on October 10.

The latest decline has brought pricing down to just shy of a 36-month low, with prices last dipping below current levels on November 3, 2016, when it resided at $10.15-11 per lb.

Once again, consumer interest was limited over the period, but some small hand-to-mouth purchasing was seen over the period at aggressively low levels.

“Each sale is lower than the next, and it really doesn’t matter what the volume is. There are no major volumes moving right now,” a US supplier source said.

The premium the US market has held over the European market has been slashed considerably, but still exists at this time, leaving open the potential for further declines.

Market participants expect prices may continue to come under pressure over the near term.

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