GLOBAL VANADIUM WRAP: Chinese Vanadium Market Rebounds; European V2O5 Price Jumps by 17%

Export prices for ferro-vanadium and vanadium pentoxide (V2O5) in China rebounded last week, bolstered by strength in both the domestic and European vanadium markets; in Europe, tightened availability and a firmer ferro-vanadium market drove the V2O5 price up by around 17%.

China’s export price for ferro-vanadium gained some upward momentum on Thursday November 14, underpinned by the strength seen in both the domestic and international markets last week.

Fastmarkets assessed the price of ferro-vanadium, 78% V min, fob China at $28-30 per kg on November 14, up by 5.5% from $26.50-28.50 per kg in the previous week.

This is the first increase since late July when the price trended upward amid growing demand from Chinese steel mills, some of which had never bought vanadium products before, stockpiled certain volumes in preparation for the quality check on rebar in some regions at the time.

The ferro-vanadium export market in China remained quiet last week with sparse buying interest captured from abroad.

“We still did not receive any inquiries from abroad despite the recent narrowing of price gap between China and Europe,” a Chinese ferro-vanadium exporter said.

The price differential between Chinese and European markets narrowed to $5-6.25 per kg last week from $5.90-6.90 per kg a week earlier, according to Fastmarkets’ latest assessments.

Despite a lack of liquidity in the export market, the export price for ferro-vanadium managed to tick up after Chinese exporters raised their expectations of a tradeable price after noting the domestic price gained some strength last week.

China’s domestic ferro-vanadium market strengthened over the past week after suppliers either held offer prices firm or raised them amid some resumed buying interest from downstream mills, market sources told Fastmarkets.

A number of mills re-entered the market to restock raw materials, including vanadium products such as ferro-vanadium and vanadium nitrogen, to meet prompt production needs, market sources added.

“Some mills do not have sufficient stocks at plants because the price had been on the decline and they had been expecting lower prices. When they noticed that alloy plants resisted surrendering much further on the price, they placed orders for some volumes instead because they need to maintain normal production,” a Chinese market participant said.

Though many sources believe that prices of vanadium products in China will continue to face downward pressure due to the generally weaker demand experienced in the fourth quarter of the year, they agree that the price will not see further significant dips in the near term because alloy plants who purchased V2O5 at the current price will be reluctant to cut alloy prices by a large margin.

Upstream, China’s export price for V2O5 also saw an uptick last week, following the trend in the domestic market.

Fastmarkets assessed the price for vanadium pentoxide, 98% V2O5 min, fob China at $6.20-6.40 per lb on November 14, up by 2.4% from $5.90-6.40 per lb a week before. 

Some foreign buyers showed interest in booking material from China but Chinese exporters refused to offer because they can get a higher price domestically than selling abroad.

The Chinese domestic V2O5 price rose a bit last week in response to growing buying appetite from both traders and alloy plants, who have become more comfortable in placing orders, and suppliers raised offer prices amid the increased inquiries as a result.

“There were many inquiries this [past] week and we have sold around 200 tonnes of V2O5,” a Chinese V2O5 supplier said on November 14.

European FeV price continues uptrend
The European ferro-vanadium price narrowed upward further last week on improved sentiment.

Fastmarkets assessed the price for ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe at $23-23.75 per kg on November 15, up from the mid-week assessment of $22-23.75 per kg, when prices had moved up to that level from $20.60-21.60 per kg on November 8. 

Ferro-vanadium prices in Europe had been on a downtrend for most part of the year after hitting an 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.

The V2O5 market followed the alloy’s move higher, with Fastmarkets assessing the price for vanadium pentoxide 98% V2O5 min, in-whs Rotterdam at $5-6.05 per lb on November 15, up by 16.9% from $4.45-5 per lb in the previous week.

A 10-tonne deal was concluded at the higher end of the range, with market participants reporting difficulty in securing material at lower levels.

“It’s difficult to find material in Europe with the Chinese not exporting much in the past few months,” a trader in Europe said. “If you manage to find material, it’s not going to be cheap.”

Still, the sustainability of the increase remains in question, market participants said, with consumer demand remaining low.

“The move up can’t be sustainable for a long time with end-user demand not improving and most of the activity coming from traders,” a second trader in Europe said.

Meanwhile, market’s attention is now moving to long-term contract negotiations, with discounts expected to widen on a year-to-year basis, according to market sources, on expectations of a weaker steel market in the coming year.

vanadium prices, vanadium pentoxide prices