Vanadium prices7 Mar 2019 15:27
Will vanadium prices return to their 2018 highs?
Vanadium prices in the Chinese and European markets both hit all-time highs last year, in part due to an expected increase in demand stemming from the implementation of new rebar standards in China, which came into effect on November 1, 2018.
The revised policy calls for domestic steelmakers to produce rebar with a set tensile strength, which can be achieved by adding ferro-alloys including ferro-vanadium.
But Chinese vanadium prices began to drop sharply late in 2018 when market participants realized that the enforcement of the revised rebar policy was not as stringent as had been expected. Prices stabilized at the start of 2019 and even started showing signs of strengthening in recent weeks due to renewed buying interest from domestic mills.
Fastmarkets’ assessment of the export price for ferro-vanadium, min 78%, fob China, hit an all-time high of $130-140 per kg on October 18 last year, up by 176% from $48-50 per kg on January 4. The price was most recently assessed at $74-76 per kg on February 28.
The price assessment for ferro-vanadium, 78%, free delivered duty paid, in Europe, reached an all-time high of $126-128 per kg on November 16, 2018, up by 165% from $46.50-49.50 per kg at the start of that year. The price was most recently assessed at $75-76 per kg on March 6.
Many market participants will be keen to find out whether vanadium prices might return to last year’s highs given that nationwide inspections on rebar quality are expected to take place this year, though no official guidance has been released as to when these inspections might take place.
What are the main drivers for the vanadium market in 2019?
As is the case for minor metals participants, the news of a fresh round of nationwide environmental protection inspections across China this year is likely to be a major talking point for noble alloy participants at this year’s conference as well.
Possible constraints on production, and therefore availability, in China could have significant upward pressure on prices for upstream vanadium products, which would then affect the profit margins of downstream consumers.
Chinese steel mills’ acceptance of a ferro-vanadium price largely depends on their profit margins. Typically, the more profit they make, the more likely they are more tolerate increases in raw materials prices.
If mills feel they can no longer make a healthy enough profit utilizing ferro-vanadium, they may be compelled to switch to alternative alloys. Indeed, in the months following the surge in vanadium prices in October and November 2018, Chinese mills had increasingly turned to more cost-effective alloys such as ferro-niobium as an alternative to ferro-vanadium.
Chinese imports of ferro-niobium hit a multi-year high of 35,909 tonnes in 2018, while shipments hit an all-time high for a single month of 7,010 tonnes in January this year, according to official but unconfirmed data seen by
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