Generic Hero BannerGeneric Hero Banner
Latest market news

Upward momentum builds in vanadium market

  • Market: Metals
  • 16/02/21

Vanadium market participants are becoming increasingly bullish in their outlooks for demand and prices, anticipating growth from both traditional and emerging end-use bases, along with price gains.

European prices for both pentoxide and ferro-vanadium have risen sharply in the past two weeks (see charts), incurring premiums to the fob China market that may or may not survive once the lunar new year holiday ends. Analysts from UK-based Alternative Resource Capital (ARC) and SP Angel expect duty-paid Rotterdam ferro-vanadium prices to stand at around $35-40/kg by 2022, which compares with a midpoint of $32/kg dp Rotterdam as last assessed by Argus on 12 February. Sellers are already pushing prices up toward that band, with offers lately touching $34/kg.

Europe's current price hikes are partly underpinned by tight supply, with a lack of availability from China and major European producers sold out until the end of March. But in the longer term, it is the demand side of the equation that is dominating outlooks and bolstering price expectations.

Uptick in traditional V demand

Covid-19 vaccine rollouts and macroeconomic improvements are encouraging vanadium producers to look to the medium term, with construction projects in emerging economies catching up to the vanadium-intensity of those in more developed western economies. As demand for rebar in emerging economies — particularly China and India — grows, so too does demand for steel with a higher tensile strength that allows for futuristic steel-intensive skylines like in Pudong, Shanghai.

Construction projects to prevent severe flooding along the Yangtze river are also a driving force for recent doubling-down on growth in China, reflected in recent operational updates by some vanadium producers. South Africa's Bushveld Minerals more than doubled its share of sales to China in 2020, to 21pc from 10pc in 2019 — equating to around 807t of vanadium last year.

SP Angel highlights a push to upgrade buildings and infrastructure in China's richer eastern provinces that is set to coincide with a wave of new construction projects in central and western provinces to modernise living conditions for most Chinese citizens. Co-production of vanadium from magnetite iron ores could also be set to decline as China's higher cost domestic iron ore mining firms compete with lower-priced imported iron units.

Batteries inject upside price risk

While the steel industry still dominates the vanadium demand base, growing attention is being given to the development of vanadium redox flow batteries (VRFB) and analysts caution that their medium-term ferro-vanadium price forecasts might turn out to be conservative if VRFBs take off faster than expected.

Australia's Atlantic Vanadium is also upbeat on the outlook for VRFBs and its impact on global vanadium demand, building a 7,600 t/yr operation to sell 99.6pc grade material by 2023.

Atlantic expects the battery sector to account for 50pc of demand by 2025 — a rapid rise given batteries accounted for just 0.3pc of vanadium consumption in 2020. It remains to be seen if this would be feasible, particularly given market participants expect demand for vanadium from the steel industry to reach around 95,000t by 2023, which would imply the same volume for batteries and a doubling in global vanadium production. At an average greenfield capital cost of around $50,000/t, the industry would require almost $4.8bn of investment to close the supply gap if scaleable and accessible deposits can indeed be developed.

Canada's Largo Resources is positioning itself for a potential boom in VRFB demand and does have a scaleable and high-quality deposit to move forward with. In December, Largo launched a vertically integrated VRFB business — Largo Clean Energy — to "provide clean energy storage systems to the fast-growing, long-duration renewable energy storage market". Its VCharge± battery system is designed to have three times higher power density than others in the market and will be more reliable in production given its vertically integrated ownership structure, the company said.

FeV prices jump last week $/kg

FeV now in line with V205 prices $/lb

Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
20/02/25

Mexico central bank slashes '25 GDP outlook on tariffs

Mexico central bank slashes '25 GDP outlook on tariffs

Mexico City, 20 February (Argus) — Mexico's central bank slashed the country's growth outlook for 2025 by half, citing potential US tariffs. The central bank cut its forecast for gross domestic product (GDP) growth to 0.6pc for the year, from a prior 1.2pc estimate. Growth was 1.5pc in 2024. In making the revision, the central bank said the weaker growth outlook is due to "high uncertainty" over potential US tariffs and other measures taken by the new US administration. The threat of tariffs alone will impact investment and consumption in Mexico this year, the bank added in its quarterly inflation presentation Wednesday, with the uncertainty potentially extending into upcoming discussions over the USMCA free trade agreement. The central bank provided a range of between -0.2pc and 1.4pc for 2025 growth, while 2026 growth should fall within a range of 1pc and 2.6pc. The central bank updated its inflation outlook, with Mexico's year-end annual consumer price index (CPI)estimated at 4.5pc, slower than its previous 4.7pc estimate. However, the bank said more time is needed to bring CPI down to its goal of 3pc, projecting this will occur in the fourth quarter of 2026, a year after its previous estimate. CPI eased to an annual 3.59pc in January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy, consumer goods and services. In a 6 February decision, the central bank accelerated its current rate easing cycle, cutting its target rate by a half point to 9.5pc. It said the board is considering cuts of similar magnitudes in coming months, with the next meeting set for 27 March. Board governors addressed the potential inflationary impact that could occur with the enactment of major US tariffs on Mexico, arguing the flexibility of the Mexican peso-US dollar exchange rate should help absorb some tariff impacts. "Conceptually there would be no reason to rule out a scenario where tariffs materialize and at the same time the central bank could cut the target rate by 50 more [basis] points," said deputy governor Gabriel Cuadra, who joined the board earlier this month. Cuadra added the Mexican economy has proven resilient to complex challenges, adding the bank is ready to confront any eventuality with the trade dispute, citing solid foreign reserves and multiple tools for confronting inflationary spikes. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more
News

EU CBAM to halve S African aluminium export value


20/02/25
News
20/02/25

EU CBAM to halve S African aluminium export value

Cape Town, 20 February (Argus) — South Africa's aluminium exports could lose more than half their value to levies under the EU's Carbon Border Adjustment Mechanism (CBAM), according to manufacturer Hulamin. South African products exported to the EU are assumed to have embedded greenhouse gas (GHG) emissions of around 18t CO2 equivalent (CO2e)/t on average, Hulamin environmental sustainability head Hendrik de Villiers said. Hulamin is Africa's largest aluminium manufacturer, with a capacity of 200,000 t/yr. The exact CBAM levy is not known yet, but a rate of €80/t CO2e would translate into €1,440/t for unprocessed South African aluminium, De Villiers noted. Assuming an LME aluminium price of €2,500/t, CBAM could absorb well over 50pc of the value of unprocessed South African product by 2034, he said, adding: "This is, of course, the worst-case scenario, where no mitigating actions are taken." De Villiers was speaking during a webinar hosted by the EU Chamber of Commerce and Industry in Southern Africa and the European Delegation to South Africa. CBAM's transition phase — during which EU importers must provide greenhouse gas (GHG) emissions data to the EU — ends on 31 December 2025. From 1 January 2026, EU importers will have to surrender CBAM certificates for emissions embedded in their products. By 2034, it is assumed CBAM will be levied on Scope 1 and Scope 2 emissions. Scope 1 emissions are direct GHG emissions from a company's operations, while Scope 2 are from the generation of a firm's purchased electricity. In 2023, South Africa's CBAM-affected exports to the EU had a total value of €1.1bn, or 5pc of the total value of the country's exports, according to the European Commission's directorate of taxation and customs. "CBAM will have an important impact on South Africa, because around 4pc of the country's global exports are iron and steel and around 1pc is aluminium," the directorate's CBAM unit head, Vicente Hurtado Roa, said. The EU also receives some 35pc of South Africa's aluminium exports, he said. The European Commission's own figures show South African exports of CBAM goods to the EU running at 1.09mn t/yr — with 900,000t of this iron and steel, and the rest aluminium. De Villiers outlined measures that could help mitigate CBAM costs. Manufacturers could cut their energy intensity through efficiency improvements, for example. Scope 2 emissions can be reduced by integrating renewables and other low-carbon generation sources into the aluminium supply chain. "However, this cannot be done independent from the national grid," De Villiers pointed out. De Villiers also suggested that the South African government should use the country's carbon tax to offset CBAM and retain tax revenues locally. Since CBAM takes into account carbon taxes paid in the country of origin, the government should tax emissions and use the revenue to support decarbonisation of domestic industry, especially energy-intensive users that benefit the economy but are at risk from the high grid emission factor. Around 80pc of South Africa's electricity is coal-fired and the country is the 15th largest GHG emitter, according to the World Resources Institute. This means the inclusion of Scope 2 emissions in CBAM is South African energy-intensive manufacturers' "biggest concern", De Villiers said. South Africa's carbon tax was phased in from June 2019 at 120 rand/t CO2e ($7/t CO2e), and had increased to R134/t CO2e by the end of 2022. The Treasury is targeting $30/t CO2e by 2030. By Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

EU HRC futures jump on likely safeguard tightening


20/02/25
News
20/02/25

EU HRC futures jump on likely safeguard tightening

London, 20 February (Argus) — European hot-rolled coil (HRC) futures and equities rallied this morning, in expectation of a tightened steel safeguard. The European Commission is due to inform the WTO next week of the results of its functional safeguard review, and some buyers believe mills are anticipating a strong cut in imports, given their toughened pricing stance. The market leader has informed buyers it will be seeking €680/t in the coming days, potentially moving to €700/t in the next week or two. Other mills have also pulled their offers in expectation of stronger pricing. Trade was brisk on the CME Group's north EU HRC contract this morning, with increased buying interest on the comparatively flat curve. Two March-April spreads traded at -€10/t, with the outright prices at €625-635/t, while a 5,000t April trade concluded at €643/t, up by €8/t on yesterday's settlement. May nudged up by €5/t to €645/t, for 2,000t, before trading a minute later at €648/t, again for 2,000t. On screen, March and April both rose by €10/t to €635/t and €645/, respectively. Some mill equities also rallied, with ThyssenKrupp rising by over 3pc as of 11:25 GMT and Salzgitter rising by almost 4.5pc by 11:23 GMT. EU HRC futures appear to have shrugged off the initial malaise following the news of new US import tariffs , with volume also rising today; almost 19,000t had traded by 11:24 GMT, the highest daily volume since 4 December. The likelihood of a tighter safeguard, and the fresh increases sought by mills, bolstered the curve, which had been constrained somewhat by active selling from traders hedging their physical inventories, sources said. Service centres of late have noted an increased number of domestic offers from traders, which bought material — normally from service centres — in the weak fourth-quarter market. Some of that inventory has been offered at a fixed price recently, with deals concluded around €570-580/t ex-stock, while some has been offered at a discount to Argus ' north EU HRC index, the underlying settlement basis for the CME contract. Physical HRC prices have increased quite sharply in the past five weeks, largely driven by a reduction in import volumes, despite underlying demand remaining weak. Argus ' north EU HRC index jumped by €52.50/t from €558.25/t on 6 January to €610.75/t on 19 February, while the daily Italian index rose by €40.50/t from €566.75/t to €607.25/t, over the same period. Margins for north EU HRC producers have increased by €49.44/t over the same period to over €122/t, their highest level since 10 September last year. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Australia's Wesfarmers on track to achieve LiOH output


20/02/25
News
20/02/25

Australia's Wesfarmers on track to achieve LiOH output

Singapore, 20 February (Argus) — Australian conglomerate Wesfarmers is "cautiously optimistic" about successfully commissioning and running its upcoming 50,000 t/yr Kwinana lithium hydroxide refinery in collaboration with Chilean lithium firm SQM as it dismissed concerns raised by analysts. The commissioning of the Kwinana facility is 64pc complete as of this week, said Wesfarmers. First lithium hydroxide output is expected in the middle of 2025. The target for Wesfarmers' chemicals, energy and fertilisers arm WesCEF's share of spodumene concentrate production for the July 2025-June 2026 financial year has been set at 190,000t. "We feel that we have adequate experience [and] capability together with our team in SQM to commission and run [the facility] successfully," said Wesfarmers' managing director Rob Scott during its latest half-yearly results briefing on 20 February. "Ultimately time will tell in the next 6-12 months," he said. Scott was responding to a question posed by an analyst that brought up concerns over the difficulty of building and operating a lithium hydroxide plant in Western Australia because of a lack of technical and processing capability in the state, after the analyst said a similar comment was recently made by US lithium firm Albemarle's chief executive officer Kent Masters during a conference. "When you look at that vertically integrated operation once we hit full production run rates and get to fractionalise that cost, we still think it's a viable and beneficial project for Wesfarmers," said WesCEF's managing director Aaron Hood. Wesfarmers owns Covalent Lithium, which runs the Mount Holland project in Australia that produces its spodumene concentrate, in a 50:50 joint venture with SQM. WesCEF's share of spodumene concentrate output totalled 70,000t during July-December 2024, in line with its guidance , with higher production throughput. Sales of spodumene concentrate came in at 80,000t for the same period. Sales of spodumene concentrate into the market will continue going into July 2025-June 2026 as the refinery goes through its ramp-up, added Hood, with the group seeing it "challenging" to generate profit through lithium hydroxide sales in the same period. WesCEF's lithium business continued to be loss-making and made a loss of A$24mn ($15.3mn) in July-December 2024 because of lower lithium market prices and higher unit costs of production during its ramp-up. Argus -assessed prices for 6pc grade lithium concentrate (spodumene) inched down to $850-910/t cif China on 18 February from $850-920/t cif China a week earlier. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Hudbay Cu output up, Zn down in 2024


19/02/25
News
19/02/25

Hudbay Cu output up, Zn down in 2024

Houston, 19 February (Argus) — Canadian mining firm Hudbay Minerals produced more copper but less zinc and molybdenum in full-year 2024 than the prior year. The firm produced 137,943 metric tonnes (t) of copper in 2024, a 4.7pc increase from 2023. Hudbay also produced 33,339t of zinc and 1,323t of molybdenum in 2024, marking 3.8pc and 15pc drops from 2023 totals, respectively. Hudbay forecast copper production could slide by as much as 15pc to 117,000-149,000t in 2025. Zinc production is expected to contract by as much as 37pc to 21,000-27,000t of zinc production, while molybdenum is seen relatively unchanged at 1,300-1,500t in 2025. Sales followed a similar trend, with Hudbay selling 125,094t of copper in 2024, a 0.8pc increase from the prior year. The company also sold 25,120t of zinc, a 13pc decrease, and 1,287t of molybdenum — a 12pc decrease year on year. Copper concentrate inventories totaled 30,000t at the end of the fourth quarter, about double the normal level. Hudbay expects to sell down to normal inventory levels in the first quarter of 2025. The miner continues moving forward on its Copper World project which it estimates will produce 85,000t/yr of copper over a 20-year mine life for the purpose of producing copper cathodes exclusively for domestic US consumers. Hudbay has obtained all necessary permits and plans to complete feasibility studies in the first half of 2026. The Papacancha facility should reach depletion sometime in December 2025, Hudbay reported a record annual revenue of $2.02bn in 2024, a $331mn jump from 2023. Profit shrank to $67.8mn, a $1.7mn drop from 2023. By Cole Sullivan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more