Atlantic Ltd. said the narrowing price gap between the North
American ferrovanadium market and the rest of the world has led
the company to turn its focus to European and Asian consumers
as it continues to ramp up its Windimurra project in Western
Australia-based company has noticed European and Asian
transaction prices catch up in recent years, after initially
being most interested in servicing the North American market,
Atlantic managing director and chairman Michael Minosora told
"Our focus has
traditionally been on the North American market because of a
combination of factors, including higher prices paid for
ferrovanadium," he said. "Whats happened over the last
few years is the margin between and European and Asian markets,
and the U.S. market has closed significantly, which causes us
to rethink our preferences for where were placing our
Minosora said the
company is looking to break the tradition of fixed contracts
that cover just six months or one year in favor of agreements
that cover multiple years.
were working to have longer-term arrangements with our
end-users rather than continue to behave like many existing
ferrovanadium producers, which are subject to one-year
contracts. I dont think thats sustainable in the
long run," he said.
"Having pricing based
on one-year contracts, or spot pricing on a monthly basis, is
not a sound business model for us. Were making a
substantial investment in a specialty metal product, and for us
to continue to invest in the business and for us to get the
mutual long-term benefits, we need more certainty.
"From an end-user
point of view, they need more certainty in having product
readily available at a reasonable price. We have spoken to a
number of end-users on this basis, but it is tough going,
because were trying to influence the market dynamic and
people dont change easily. Its something well
work on and continue to encourage end-users to go down that
path," he said.
Minosora said the
companys focus for 2014 is to be a reliable supplier of
vanadium products, with traditional supply regions such as
South Africa and China likely to yield curtailments in
"With South Africa,
its a function of whats happening in that country.
Theyre going through a period of change, which brings
with it a higher cost environment in terms of labor and
electricity, and that has to catch up at some stage," he
were seeing aggressive closures by the central government
of high-cost steel producers, who sometimes produce vanadium
slag as a by-product. My own view is that as those mills close,
then the supply for vanadium as a by-product will be curtailed.
That in turn will reduce the supply, and if the laws of supply
and demand behave rationally, we should see an increase in
Minosora recently told AMM sister publication
Metal Bulletin that Windimurra is expected to hit a
monthly production rate of 500 tonnes in 2014.