TIMELINE: Why is ferro-vanadium trading above $100/kg?
Date: Sep 24, 2018
With ferro-vanadium trading at a 13-year high in Europe, Metal Bulletin looks back at some of the key events that have set the scene for prices to more than double so far in 2018.
Evraz Highveld Steel & Vanadium and its Mapochs Mine subsidiary enter business rescue proceedings, ultimately taking nearly 4,000 tonnes per year (tpy) of vanadium out of the market.November 2015
Ferro-vanadium trades as low as $12.75 per kilogram in Europe, according to Metal Bulletin data, the lowest level since December 2003, due to weak demand, oversupply and poor sentiment. At its lowest point, ferro-vanadium has lost nearly 46% of its value since the beginning of that year.
October/November 2016
Chinese vanadium producers struggle to procure cheap slag, resulting in closures and upstream tightness. Domestic prices for vanadium pentoxide (V2O5) and ferro-vanadium start to rise.
Sellers in Europe successfully increase their offers in response to low stocks and tight raw material supplies. Sentiment improves and ferro-vanadium prices recover to more than $20 per kg.
November 8, 2016
Negotiations for 2017 supply contracts indicate discounts to Metal Bulletin’s ferro-vanadium price will narrow, with market tightness and earlier mine closures starting to filter through.
January 2017
The year starts on a strong note for vanadium: V2O5 prices rise due to tight supplies, and cheap stocks of ferro-vanadium filter out of the market.
May/June 2017
The Chinese market continues to strengthen over the coming months and Chinese sellers retreat from the spot export market, safe in the knowledge that they can achieve premium prices in the domestic market, where supplies are tight and demand is robust. The European market lags behind due to slow demand during the summer, availability of cheaper units and trader profit-taking.
July 2017
Stark regional price variations – specifically, the premium available for ferro-vanadium in the Chinese domestic market versus Europe and the United States – drives Chinese sellers to become buyers in Europe, and mopping up the remaining cheaper units. Ferro-vanadium is trading in a range of $28.50-29 per kg fob China while prices in Europe languish at $26-26.60 per kg delivered duty-paid on Friday July 14.
European ferro-vanadium prices then rally as much as 61.5% between July 10 and July 24, according to Metal Bulletin data, as environmental inspections in in the major Chinese production hub of Panzhihua, Sichuan, signal tightening supplies. V2O5 prices rally as much as 92.5% between July 10 and July 31, and sellers boost their offers for both alloy and raw material.
“Consumers say you’re crazy, check the market, panic and then come back and ask you what’s going on,” a trader told Metal Bulletin.
August 2017
Market sources predict vanadium output in China will fall by about 35% in Augustafter producers in the major production hub of Sichuan province are ordered to cut output over the summer. Around 2,500 tonnes of V2O5 output is removed from the spot market in August following a cut of almost 700 tonnes in July.
August 17, 2017
China’s ban on scrap imports is forecast to cut approximately 4,500-5,500 tonnesfrom the country’s V2O5 production per year.
According to an announcement on the Chinese Ministry of Environmental Protection website, all four categories of vanadium scrap are “forbidden” to be imported into China under new regulations expected to come into effect after December 31, 2017.
