LONDON Australias Atlantic Ltd. will look to expand the suite of products it offers from its 100-percent owned Windimurra vanadium project, chairman and managing director Michael Minosora told AMM sister publication Metal Bulletin.
The company is currently focused on ferrovanadium production, he said, although the nature of the facility at Windimurra also allows it to produce vanadium pentoxide and vanadium trioxide relatively easily.
Atlantic is also looking to produce a material equivalent to Evraz Group SAs proprietary Nitrovan, produced by its Evraz Vametco (Pty) Ltd. subsidiary in South Africa, or vanadium nitride.
"Were seeing many (vanadium producers) reporting lower production numbers over recent quarters, but the demand side remains firm," he said.
This has been reflected by a marked increase in ferrovanadium and vanadium pentoxide prices, especially at the end of 2012 and the beginning of 2013.
Since the beginning of January, Metal Bulletins quote for both ferrovanadium and vanadium pentoxide has risen by about 14 percent while AMMs U.S. ferrovanadium price rose to $14.50 to $14.90 per pound Jan. 24 from $13.50 to $14.50 per pound previously (amm.com, Jan. 25).
"Based on our levels of inquiry, I have every reason to believe those high prices will continue to firm and at a faster rate in the coming months," Minosora said, noting that Atlantic hasnt entered into any offtake agreements at Windimurra and is unlikely to do so in the future due to the strength of the spot market.
Meanwhile, frame contracts are outmoded and could become a thing of the past as the vanadium market continues to change shape, Minosora said. "We need a model that more accurately reflects the risk and reward position for both producers and consumers."
The iron ore market, for example, has moved away from this model, and toward a "free market" style of trading.
The best move, he said, would be to take two different approaches based on who the end consumer is.
For mainstream consumers, like steel mills, using the spot market to pick up the necessary supply would be best, Minosora said. But for more niche players that produce specialist alloys, the use of fixed, long-term commitments would be best.
Minosora forecast an increase of 8 to 12 percent this year in demand for vanadium products.