GLOBAL VANADIUM WRAP: China’s Fev Export Price Tumbles More Than 8%; European Market Rebounds On Improved Sentiment

The export price of ferro-vanadium in China fell again last week, narrowing the price differential with Europe, while the European market rebounded amid improved sentiment after suppliers resisted selling material below the psychological $20-per-kg level.

China’s ferro-vanadium export price continued to soften in the week ended Friday November 8 amid persistently weak buying interest from abroad and a continual decline in the domestic market.

Fastmarkets assessed the price of ferro-vanadium, 78% V min, fob China at $26.50-28.50 per kg on November 7, down by 8.3% from $29-31 per kg a week earlier.

The persistent drop in the Chinese price over the past few weeks has seen an obvious narrowing in the price gap between China and Europe, which has stifled some Chinese market participants’ interest in importing cargoes.

The price differential between China and Europe has narrowed to $5.90-6.90 per kg from $8.80-10.50 per kg in early October, according to Fastmarkets’ latest price assessments.

“The price difference [of ferro-vanadium] between China and Europe is much smaller. And I believe those who showed interest in importing vanadium products from abroad dare not do so now, because the smaller the price gap, the more risks they will face,” a Chinese market participant said.

“And the possible reduction in the inflow of cargoes from abroad might help to stem further falls in the domestic market,” the above market participant added.

The Chinese domestic ferro-vanadium market softened again over the past week after overall market sentiment was dampened further by some lower tender prices from mills.

Some ferro-vanadium suppliers insisted on carrying out production on the basis of orders received from traders and mills to play it safe, according to market participants.

Upstream, China’s export price for vanadium pentoxide (V2O5) continued to trend downward but at a slower pace.

Fastmarkets assessed the price for vanadium pentoxide, 98% V2O5 min, fob China at $5.90-6.40 per lb on November 7, down by 3.1% from $6.30-6.40 per lb in the previous week.

Some buying interest from abroad was captured last week, but failed to yield any fruitful result due to the obvious price gap between China and Europe.

“We received several inquiries [for V2O5] from both Europe and India, but we declined to offer because we know clearly that it’s still hard to conclude any deals given the still wide price gap at home and abroad,” a Chinese V2O5 exporter said.

The Chinese domestic V2O5 price eased further due to suppliers’ lowering prices further on noticing a lack of buying interest.

But some Chinese market participants were heard to have resumed certain interest in restocking V2O5 on November 8, market sources said.

“Unlike a few days before, we have received a number of inquiries since late yesterday, and it seems that some have already begun dip-buying while others remained bearish about the market,” a second Chinese market participant told Fastmarkets on November 8.

European V2O5 market flat but more inquiries heard
The European V2O5 market was steady last week but more inquiries were heard.

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 8.

“We’ve been getting more inquiries this week and it seems to be difficult to find material below $5 per lb now as people are looking to restock,” a European market source said. “There’s no support for lower pentoxide prices with the alloy prices now starting to move up.”

The European ferro-vanadium price moved up on November 8, following a drop in the mid-week assessment.

Fastmarkets assessed the price for ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe at $20.60-21.60 per kg on November 8, up from November 6’s assessment of $20-20.50 per kg, when the prices had moved down to that level from $20.50-21 per kg the previous week. Still, the European market continues to trade near its lowest since September 2016.

Ferro-vanadium prices in Europe had been on a downtrend for most part of the year after hitting all-time high late last year, partly because of an anticipated increase in demand from the implementation of new rebar manufacturing standards in China from November 1 last year.

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 reduce their consumption of vanadium.

A large-tonnage deal concluded at $20.30 per kg last week slightly lifted sentiment in the market, market sources said.

“The consumer having to pay market price for a large tonnage showed resistance and improved the sentiment,” a trader in Europe said.

“There’s resistance to go below the psychological $20 level with all the bids being unsuccessful below that level and that has lifted the market,” a second trader in Europe said.

“Europe has been more active this week and it’s been difficult to source material at the cheap level,” a third European trader said.

US FeV market sinks to fresh 3-year low
The US ferro-vanadium price continued to soften last week, slipping to fresh a three-year low, after pressure from weaker global markets continued to weigh on prices in the United States.

Fastmarkets assessed the price for ferro-vanadium 70-80% V, in-whs Pittsburgh at $10.15-10.5 per lb on November 7, down by 4% from $10.50-11 per lb a week earlier.

The US market has now declined for four consecutive weeks, with prices now down by 26.9% from $13.75-14.50 per lb on October 10.

The latest decline has brought pricing down to a more than 36-month low, with prices last dipping below current levels on October 27, 2016, when the market resided at $10-10.50 per lb.

Consumer interest was quite limited once again over the period, after only one notable mill purchase was observed.

Each successive sale continues to be transacted lower than the previous transaction while suppliers fight over sporadic, small volume business.

“Outside of one consumer we saw no new spot inquiries. Everything for us is focused on 2020 at this point,” a US supplier source said.

US prices continue to maintain a premium over the European market, which when coupled with the sluggish demand, leaves open the potential for further declines over the near term, sources said.

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