INTL FERRO-ALLOYS CONF: Vanadium rally must turn, but prices will settle at higher base

Date: Nov 16, 2018

Vanadium prices will find a much higher base than their 2015 lows when they inevitably fall, due to a structural shift in the global vanadium market, according to Amy Bennett, principal consultant at Fastmarkets MB.

“Ferro-vanadium will not stay above $100 per kg for eternity [and] at some point there will be less of a panic to get material,” delegates heard at Fastmarkets’ 34th International Ferro-alloys Conference in Lisbon, Portugal this week.

Fastmarkets assessed the ferro-vanadium price at $124-126 per kg, delivered duty-paid in Europe, and the vanadium pentoxide price at $28.50-28.90 per lb, in-warehouse Rotterdam on Friday November 9, up 207% and 275% respectively from a year ago.

The vanadium market has tightened considerably since late 2016 due to environmental inspections and a ban on imports of vanadium slag which have taken hold in China, removing environmentally unfriendly production from the country’s output.

At the same time, new regulations in China concerning a higher minimum required vanadium content in rebar have created a rush for material among consumers.

High prices and the associated credit risk have also started to squeeze traders out of the market in Europe. At today’s prices, a 24-tonne truck of ferro-vanadium would cost about $3 million in the spot market, using Fastmarkets MB data, pushing some players out of the market on account of prohibitive financing costs.

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