Chinese ferrovanadium and vanadium pentoxide (V2O5) prices continued to rally last week, while the international markets were characterized by Chinese inquiries, consolidation of price gains and trader profit-taking.
AMM sister publication Metal Bulletin assessed Chinese ferrovanadium prices at $55 to $60 per kilogram fob on Aug. 3, a jump of 35.9% week on week.
Most sellers, however, declined to offer to any export inquiries, as spot prices in Europe remain low compared with the domestic market. European ferrovanadium prices were assessed at $40 to $42 per kg delivered duty-paid in Europe on Aug. 4, up $1 on the low end of the midweek assessment.
It does not make senses to quote in the export market, and we are selling well in the domestic market, a Chinese exporter source told Metal Bulletin.
Closing prices for ferrovanadium hit 200,000 yuan ($29,718) per tonne in China last week, with offers hovering at 210,000 to 220,000 yuan, up by another 30,000 yuan from a week earlier, amid dwindling stocks.
I heard some suppliers are selling material purchased years ago, as is clear from the packaging, a second exporter source said.
The ferrovanadium rally in Europe slowed last week, with more sellers in the market.
People are coming out and saying, I have some vanadium if you need it, a trader said.
There has been a bit of a shake-out this week with traders taking profits, which are immense, a second trader said.
European ferrovanadium prices have risen 39% over the past two weeks, leaving an appealing margin for those holding stocks bought ahead of the rally.
There is some slowing down because traders are taking profits, a producer said. This is despite a considerable arbitrage alternative of selling to China, where prices are still growing. ... Theres a $10 per kg arbitrage if one is willing to risk it.
This risk lies in the sustainability of higher pricesand the time that elapses in shipping material from Europe back to China.
The question is, do the Chinese have the confidence in the rally to commit to the shipments? the second trader said.
Upstream prices strengthen
After lagging behind the ferrovanadium rally last week, European vanadium pentoxide prices were assessed at $8.50 to $10.30 per pound in-warehouse Rotterdam, up 28.8% compared with the previous assessment.
As in the ferrovanadium market, Chinese buyers are taking advantage of the arbitrage window created by the speed of the price rally in Chinas domestic market, buying vanadium pentoxide stocks from European traders to ship to China. Traders are fulfilling the inquiries with vanadium pentoxide stocks in Rotterdam warehouses, with the effect of tightening the market in Europe and setting the starting point for other inquiries in the continent.
Its being driven by Asia. Theres Korean interest, too; they normally buy V2O5 from China, the second trader said.
Meanwhile, converters in Europe remain reluctant to buy spot vanadium pentoxide, given uncertainty as to how long higher ferrovanadium prices will last, while end-user demand has proved quiet, lending support to the lower end of the quotation.
We get about five to six inquiries from China every day to sell oxide, the producer source said.
Chinese vanadium pentoxide prices rose 16.3% week on week, assessed in a range of $12 to $13 per pound fob China on Aug. 3.
The price hike remains underpinned by the low availability in supply following the shutdowns in major vanadium production hubs, such as Sichuan province, which have also supported higher prices in yuan terms. Vanadium pentoxide sales were secured in China at 190,000 yuan per tonne this week, with small deals closing at 200,000 yuan, a third exporter told Metal Bulletin.
Exporters are holding out for still higher prices, with concerns over supply disruption and replacement costs at the forefront of their minds.
My offer will be $13 or higher as I have limited stocks and cannot secure the materials at a profitable price in the domestic market, a source in China said.
Tight supply fuels US prices
The US ferrovanadium market has soared once again amid tight supply, while the Chinese and European markets continue to set the tone. US spot prices for ferrovanadium climbed to a more than eight-year high, reaching $18 to $20 per pound on Aug. 3, up 14.5% from $15.20 to $18 per pound previously, according to AMMs latest assessment; prices were last seen above current levels in December 2008.
Prices have soared for three consecutive weeks and are now up 58% from $11.70 to $12.35 per pound on July 13.
Spot market activity continues to be limited amid the rocketing prices, as buyers have opted to hold off purchases if possible.
We have seen a few buyers looking around, but most seem to be holding off if they can, a supplier source told AMM.
Some buyers are just feeling out the market. I guess they will eventually have to buy. I think they are waiting to see what the real price is out there, a second supplier source told AMM.
Despite the limited activity, suppliers are continuing to increase offers in line with prices overseas, with the knowledge that supply options are limited at this time.
No one who has actually has stock is going to be giving it away right now, a third supplier source said. Suppliers are holding a hard line on their offers.
Charlotte Radford, London, and Anna Xu, Shanghai, contributed to this article.