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Ferrovanadium climbs as market tightens

Keywords: Tags  ferrovanadium, Chinese vanadium pentoxide, vanadium pentoxide, ferrovanadium prices, Thorsten Schier

NEW YORK — Ferrovanadium prices continue to rise as domestic producers see solid contract demand and imports from foreign converters dwindle due to tightness in the Chinese vanadium pentoxide market.

"The demand for us is pretty good. (Consumers) feel guardedly optimistic about the first and second quarter," one producer source said, adding that strong demand from contract customers means he hasn’t been able to sell larger quantities of spot material despite numerous inquiries from both consumers and traders.

A second producer source said that he hasn’t been active in the spot market at all as his available material was fully committed on contracts.

As a result, one trader has struggled recently to buy material. "I haven’t been able to get (it)," he said.

Ferrovanadium prices moved to $14.50 to $14.90 per pound Jan. 24 from $13.50 to $14.50 per pound previously, with spot business for truckload quantities reported at the top end of the range and offers pegged as high as $15 per pound this past week.

The lack of availability from China comes as a result of stricter enforcement of legislation that mandates more vanadium content in rebar (, Jan. 11).

At the same time, a second trader said production of vanadium pentoxide from stone coal—which had increased significantly after a sharp rise in prices for the material in 2008 despite its high production cost—has fallen significantly as the price has since fallen below the production cost for some producers.

"The real reason for the price move is the fact that the inventory levels in China are now down to reasonable levels; in 2008, about 10,000 tonnes (of vanadium pentoxide) was produced from stone coal. In 2012, production was about 2,000 tonnes," he said.

U.S. imports of ferrovanadium fell to 355 tonnes in November, the lowest level of 2012 thus far, from 470 tonnes in October, according to the latest figures from U.S. Customs.

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