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| Global Supply And Demand Of Vanadium In CY 2009 Are Traced |
| = Price Of Vanadium Pentoxide Had Solidified, China Had Transformed To Country To Import |
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Let us trace the supply and demand of vanadium in the world for the calender year (January - December) of 2009. The world output of crude steel in 2009 came down to 1,220 million tons, having decreased by 8% compared with that in the preceding year of 2008, but, in relation to the fact that a majority of vanadium consumption has been shared by the special steel industry, the world demand for vanadium in 2009 is presumed to have had a decrease of 30 - 35% compared to that in 2008. In particular, approximately 60% in the world production of vanadium pentoxide, as raw material for production of ferro-vanadium, has been shared by the three countries of Russia, South Africa and China and, therefore, the global supply of vanadium pentoxide has been still placed on an oligopolistic situation but, in the course of the storm, which the world production of crude steel was being reduced considerably, even major vanadium producers were unable to find out any other countermeasure than a reduction of vanadium production. However, under the aspect that vanadium prices had been kept on the high levels for the last 5 years, vanadium producers had been operating at full capacity and their maintenance was postponed. Accordingly, a depression of the demand for vanadium arisen in 2009 was supposedly a good opportunity to implement repairs of facilities. Nevertheless, an oligopolistic production of vanadium pentoxide in the world caused to solidify its price in 2009 and this circumstance came up to the surface in the second half of 2009. Owing to a decrease of the demand for vanadium from the steel industry, the international price of ferro-vanadium in the second half of 2009 had fallen by 57% from that in the same period of 2008 but the price of vanadium pentoxide, as raw material for ferro-vanadium, had fallen only by 7% in the second half of 2009. In spite of some timelag, price of ferro-vanadium had moved in parallel with that of vanadium pentoxide in the past years. However, the movements of prices for ferro-vanadium and vanadium pentoxide in the second half of 2009 had a substantial differential of prices between raw material and its product. This differential of prices are thought to have been caused by an extreme restriction in sales of vanadium pentoxide to the market and also Chinese factors. China was a country to export vanadium in the past years but suddenly transformed from 2009 to the country to import vanadium. This phenomenon was already remarkable in 2009 to import nickel and such special ferro-alloys as ferro-molybdenum and, in case of vanadium, its transformation was not so dramatic but the traditional trend had been revised to a large extent. China exported 2,504 tons in material of ferro-vanadium in 2009 (compared to 5,859 tons in 2008) but, on the other hand, imported 473 tons in material of ferro-vanadium in 2009 (compared to 26 tons in 2008). Also, China exported 4,295 tons in material of vanadium pentoxide in 2009 (compared with 15,059 tons in 2008) and, on the other hand, imported 1,036 tons in material of vanadium pentoxide in 2009 (compared to 4 tons in 2008). In May to July of 2009, when prices of vanadium in China were kept on the high levels, China actively imported vanadium. The output of crude steel in China recorded 560 million tons in 2009, having increased by 11% compared with that (502 million tons) in 2008, and the quantity of iron ore (with a slight content of vanadium) imported into China in the year had increased considerably to use for steel production. The ratio of magnetite, which has contained vanadium and is being produced in China as raw material for steel production, shrunk substantially and, consequently, a share in production of vanadium slag had relatively retreated. In spite of a differential of the extents in production of vanadium, the composition in exports and imports of vanadium in China is thought to be changing. If, without relating to an expansion in production of crude steel, China would incline even in 2010 to a trend to import vanadium, the international price of ferro-vanadium should rise. The price of ferro-vanadium has already turned to rise from the beginning of 2010 and the market price of this ferro-alloy as of the end of March has returned to the level of US$32 - 34 per kg. of V (compared to US$28.70 on the average in January - March quarter of 2010). Needless to say, the world demand for vanadium has been on a basic tone to recover but is still far and difficult to return to the scale as seen in 2008, when the world consumption of ferro-vanadium reached a peak. The quantity of vanadium consumed in the world in 2009 is estimated to be 132.2 million lbs. (or 60,000 tons) on V content base, which decreased by 30 - 35% compared with that in 2008. Accordingly, the world demand for vanadium is recurring but, even if the market price of ferro-vanadium is unable to rebound to the level of US$90 per kg. of V as recorded in April - June quarter of 2008, current price of this ferro-alloy is approaching a time to challenge the price of US$61.35 per kg. of V averaged on movements throughout the year of 2008. It was informed recently that the actual cargoes of ferro-vanadium is becoming tight. For a reference, the quarterly movements of price (per kg. of V content) for ferro-vanadium in 2009 were as per the table attached hereto. In relation to the movements of price for ferro-vanadium in 2009, the quarterly movements of price (per lb. of V2O5 content) for vanadium pentoxide in 2009 were <> January - March quarter : US$5.667 - 6.500, <>April - June quarter : US$4.300 - 4.472, <> July - September quarter : US$5.878 - 7.300 and <> October - December quarter : US$6.913 - 7.100. Russia and South Africa are major countries to produce vanadium and the quantities of vanadium produced in these two countries in 2009 were as follows ; (1) Russia produced 59.94 million tons of crude steel and produced 37,726 tons in material of vanadium pentoxide (on 72% V base), as decreased by 7% from that in 2008, and 6,237 tons in material of ferro-vanadium, as decreased by 26% from that in 2008, and (2) South Africa (Xstrata) produced 2,284 tons in material of ferro-vanadium, as decreased by 37% from that in 2008. Rhovan, a subsidiary of Xstrata, suspended to operate its plant for 3 months in July - September quarter of 2009, in order to implement the maintenance of facilities. Although the output of ferro-vanadium in 2009 was reduced to a considerable extent, the world production of vanadium pentoxide was decreased to a small extent and, accordingly, it is supposed that a substantial quantity of vanadium slag has been accumulated at steel mills, as producers of vanadium slag. This aspect is leaving an anxiety for factors to put a pressure on the vanadium market in 2010. Evraz of Russia increased their production of vanadium in form of slag by 7.8% in 2009 compared to that in 2008 but, owing to the slumped markets in Europe and the USA, the quantities of ferro-vanadium and vanadium chemicals produce by Evraz in 2009 had a large decline of 33% from that in 2008, This considerable differential between vanadium slag and ferro-vanadium is marked. However, since the fee to convert from vanadium slag to vanadium pentoxide is only US$1.20 per lb.of V, there is an opinion in the market that it would be the better way to process vanadium slag to vanadium pentoxide than to stock in form of vanadium slag. The realities of vanadium market will be evidenced by how extent do prices of vanadium products recover.. The quantities (on material base) of ferro-vanadium produced, consumed and imported by Japan in the calender year of 2009 were <> production : 2,234 tons (compared to 3,477 tons in 2008), <> consumption : 4,512 tons (8,136 tons in 2008) and <> imports : 2,713 tons (6,393 tons in 2008). The output of crude special steel in Japan in 2009 came down to 15.93 million tons, having had a considerable decrease of 38% compared with that in the preceding year of 2008. Therefore, the consumption of ferro-vanadium in Japan for 2009 decreased to half of that for 2008 and this sharp decline in consumption of ferro-vanadium came up to the surface with the reduced imports of ferro-vanadium, because the increased stocks of ferro-vanadium at steel mills and producers were adjusted by the reduced quantities in domestic production and imports. The quarterly quantities (on material base) of vanadium pentoxide and ferro-vanadium produced, imported, sold, consumed and stocked by Japan in the calender year of 2009 were as per the table shown below ; |
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| last modified : Mon 05 Apr, 2010 [11:31] |
