GLOBAL VANADIUM WRAP: Chinese exporters cut offers on weak local demand, EU market follows

Date: Dec 20, 2018

Chinese exporters continued to aggressively slash offer prices in response to sparse buying interest amid weak domestic demand, while European ferro-vanadium prices followed the move down.

  • Chinese exporters cut offering prices amid weak domestic demand
  • European FeV market plummets after taking its cue from the weakening Chinese market
  • European V2O5 flat amid illiquidity, further downward pressure looms
  • US FeV market continues to slide at slower rate amid illiquidity supply consolidation

Chinese ferro-vanadium export prices continued on the downward trajectory in the latest pricing period ending Thursday December 13, with Chinese traders cutting their offer prices further to attract overseas buyers amid the continuously sharp decline in China’s domestic market on subdued demand.

Fastmarkets’ price assessment for ferro-vanadium, fob China, fell to $80-90 per kg on Thursday, down 19.4% from $103-108 per kg a week before.

“We lowered our offer to $100 per kg [last week] but buyers were still reluctant to accept our prices. Therefore, we have no deals concluded in the past week,” a Chinese ferro-alloy smelter, who offered at around $108 per kg previously, told Fastmarkets.

Some Chinese traders gave up offering in the pricing week after realizing that buyers from overseas market would become much more mindful of placing orders on the expectation that [export] prices would drop further in the following weeks concurrent with the softening in the Chinese domestic market, Fastmarkets understands.

“We did not offer this week, though we received some inquiries, as we feel there is no sense in offering right now because however low we offer, European customers would not place orders. They currently show little interest in procuring seaborne cargoes and instead prefer to buy spot cargoes,” the first Chinese trader said, adding that they have no readily available spot cargoes in the European market.

“Overseas buyers would not find it easy to buy material from China right now, not because they do not have demand but because they are waiting for a much lower price,” a second Chinese trader said.

China’s domestic ferro-vanadium market continued to show signs of softening amid the lack of buying interest from domestic mills.

“Many [Chinese] steel mills showed their preference for using the vanadium-nitrogen alloy, which also tumbled significantly because it’s more cost-effective for them,” a market participant said.

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