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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

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Global HRC quota could be workable: Eurofer


21/02/25
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21/02/25

Global HRC quota could be workable: Eurofer

London, 21 February (Argus) — A global hot-rolled coil (HRC) quota managed on a monthly basis could be a viable measure adopted by the EU steel safeguard review, according to steel association Eurofer. The idea of a global quota was proposed to the European Commission by Hyundai Steel and the Korean Iron and Steel Association, according to documents obtained by Argus . In a 13 January submission to the commission Hyundai Steel said a global quota allocated monthly would "help ensure smoother trade flows and better supply chain management, preventing distortions that could arise from uneven utilisation of the quota". The fact some countries quickly exhaust their 15pc of the other countries quota risks a "sudden influx" that can flood the EU market, Hyundai said. South Korean mills have their own quota, which typically only fills or goes critical towards the end of the quota period; it went critical earlier in this quarter, however, going critical in the second half of February. The Korean Iron and Steel institute echoed the views of its member Hyundai, suggesting there should be monthly restrictions or increasing tariffs on volumes above the quota level. In a submission to the commission earlier this month, Eurofer said this solution could be workable and prevent "gaming" of the system if accompanied by a first in-first out duty regime — meaning no pro-rata of duties on the first days of a quota — and if its earlier adjustments were adopted. In a 10 January submission Eurofer requested that the flat steel quota should be cut by 50pc to better align quotas with current demand, and that if this was not possible other measures could be taken to reduce import penetration. These measures included the introduction of individual quotas for China and a melt-and-pour rule that means any steel produced using Chinese substrate could come under this quota; this would have most impact on cold-rolled and hot-dip galvanised coil imports produced using Chinese HRC. Eurofer also asked for an increase in the 25pc duty where quotas have been filled; the introduction of first-in first-out, meaning all material pays the fully duty where quotas have been filled; the expansion of 15pc caps to other residual quotas, and the reduction of the HRC residual quota cap to 7.5pc. It also said there should be no carryover of leftover quota between quarters, that more country-specific quotas should be introduced, with a corresponding reduction in residual quotas, and that liberalisation of the quota should be removed. While Eurofer and some importers seem to see eye-to-eye on the idea of a global quota, it is likely that they hold varying views on how much tonnage should be included duty-free. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico central bank slashes '25 GDP outlook on tariffs


20/02/25
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20/02/25

Mexico central bank slashes '25 GDP outlook on tariffs

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EU CBAM to halve S African aluminium export value


20/02/25
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20/02/25

EU CBAM to halve S African aluminium export value

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EU HRC futures jump on likely safeguard tightening


20/02/25
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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.

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