GLOBAL VANADIUM WRAP: Upward Momentum in Ferro-Vanadium Stalls on Slowing Spot Activity

The upward momentum in global ferro-vanadium markets stalled in the week ended Friday August 9, with prices in Europe and China edging down.

• Chinese, European FeV prices edge down after spot activity slows
• V2O5 prices weaken in China while European market continues to rise
• US ferro-vanadium prices soften amid renewed activity

After rising for three consecutive weeks, the export price for ferro-vanadium in China stalled last week amid broad weakness exhibited in the domestic market.

Fastmarkets’ assessment of the export price for ferro-vanadium, 78% V min, fob China was $40-42 per kg on August 8, unchanged from a week earlier.

Few deals were reportedly concluded in the export market this past week due to the still wide price gap between the Chinese and European markets, despite the recent losses recorded in China’s domestic market.

Fastmarkets’ latest assessments show that the price gap between China and Europe was still as wide as $9-9.95 per kg.

Fastmarkets assessed the price of ferro-vanadium basis 78% V min, 1st grade, ddp Western Europe at $31-32.15 per kg on August 9, down from the mid-week assessment of $31-32.95 per kg on August 7 after spot activity slowed down.

Business was concluded within the latest range in Europe while higher offers seen earlier in the week had disappeared by August 9.

“The domestic price in China is still much higher than the European price, though the former has already showed clear signs of softening this week,” a Chinese ferro-vanadium exporter said on August 8.

“We did receive several inquiries from abroad, even more than those in the previous week, but those potential buyers retreated silently after learning our unwillingness to sell below $42 per kg,” the exporter added.

The Chinese domestic ferro-vanadium price slid after the buying interest from steel mills waned due to their completing the replenishment for vanadium products in the previous weeks. Chinese mills usually enter the market for restocking at either the beginning or the end of a month, according to market sources.

Some ferro-vanadium suppliers with stocks on hand had to compete with each other by lowering their offer prices to entice limited buying appetite, and the domestic price softened as a result, market sources said.

Many market participants, however, believe the latest price dip is just a reasonable correction of the market.

“I see it as a normal downswing because the [vanadium products] price rose too significantly in the previous week,” a Chinese market participant said on August 8.

V2O5 in China corrects lower but Europe continues to edge up
The weakness in vanadium products over the past week came despite the latest upward adjustment in vanadium pentoxide (V2O5) by a major supplier in China.

Chengde Jianlong, one of the major V2O5 producers in China, announced on August 6 that it would raise its latest long-term contract price to 150,000 yuan ($21,242) per tonne, (equivalent to $9.70 per lb) from the prior 125,000 yuan per tonne (equivalent to $8.10 per lb), market sources told Fastmarkets.

But the move, which was supposed to buoy the domestic market a step further, was offset by the shrinking buying interest as a result of risk aversion.

“I do not think any one dares to secure cargoes at the price, because it’s way too high especially when people are not confident enough in the near-term [vanadium products] price gains,” a second Chinese market participant said.

China’s export price for V2O5 moved down, tracking the trend in the domestic market.

Fastmarkets assessed the export price of vanadium pentoxide 98% V2O5 min, fob China at $8.40-9.70 per lb on August 8, down by 2.2% from $8.50-10 per lb in the prior week.

Chinese domestic V2O5 price fell evidently in the past week amid subdued buying appetite from alloy smelters. The competition among suppliers to secure business accelerated the pace of softening, according to market sources.

Some V2O5 suppliers became active in selling off their cargoes on detecting that the price has already hit its ceiling. Consumers, on the other hand, sit on the sidelines on noticing a growing number of offers.

“We could feel clearly how eager suppliers are to offload their stocks at hand now,” a second Chinese market participant said. “We received many calls asking whether we need some volume in just one morning, but no one is in a hurry to place orders when the price is on the decline.”

Meanwhile, V2O5 prices in Europe continued to edge up after last week’s more-than-10% increase. Fastmarkets assessed the price of vanadium pentoxide 98% V2O5 min, in-whs Rotterdam at $7-7.50 per lb on August 9, up by 2.1% from the previous week’s assessment of $6.70-7.50 per lb.

“Prices in Europe are still catching up with China, although demand is weak here,” a trader in Europe said.

Small volume deals were concluded above the current range while offers for one-truck inquiries were heard within the new range.

US ferro-vanadium market softens
The US ferro-vanadium market softened once again despite an uptick in activity over the period.

Fastmarkets assessed the price of ferro-vanadium 70-80% V, in-whs Pittsburgh at $14.65-15.25 per lb on August 8, down by 1.2% from $14.75-15.50 per lb a week earlier.

An increase in spot inquiries were observed over the period, leading market participants to expect prices have now found a bottom.

“There were a few mills coming into the market as well as some interest from the trade. I think that speaks to some more confidence in the market at current levels,” a US supplier source explained.

“Given the improved state of the global market, it makes sense that we are looking at the bottom now,” a second US supplier source stated.

Market participants expect market activity will quiet in the near term amid the slowed summer period, with pressure coming off of prices over that time.

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