Date: Nov 19, 2018
Fastmarkets MB presents the key things we learned when the ferro-alloys community gathered for a busy week of meetings and contract negotiations in Lisbon at the 34th International Ferro-alloys Conference on November 11-13.
Ferro-vanadium and vanadium pentoxide prices sit at or near historic highs due to significant global supply concerns, and market participants could not foresee an end to the supply issues over the near term.Estimates of a 5,000-7,000 tonne global vanadium deficit were suggested during the conference in Lisbon, with an expectation of this deficit expanding due to the newly adapted rebar standards in China. Enforcement of these standards began at the start of this month.
With the estimated demand impact of these rebar standards ranging from an additional 5,000-20,000 tonnes per year of vanadium, it was clear market participants were concerned with the seemingly widening deficit.
Delegates were at a loss when trying to predict the inevitable correction on vanadium prices given the fundamental shortage the global market faces in 2019. While niobium substitution is expected to help some steelmakers achieve these rebar standards, it is not expected to be enough to eliminate the deficit in the near term.
There’s only so far ferro-niobium substitution can go:
Ferro-vanadium prices are up 207% in Europe compared with a year ago, and interest is mounting among consumers to substitute in with ferro-niobium, wherever possible.
“The shift [to ferro-niobium] is under way and that shift will continue the more comfortable engineers get,” Fastmarkets North America non-ferrous editor Chris Kavanagh said.
Ferro-niobium deals are typically agreed on a multi-year, fixed-price basis, rather than being tagged to third-party spot price assessments that fluctuate according to market fundamentals.
“In a fairly normal market we think 10-15% of ferro-vanadium demand could be subbed with ferro-niobium, but with the market where it is now, there’s more incentive to pursue that. The steelmakers can try to be more flexible, but there are restrictions – ferro-niobium works better in some applications than others,” Fastmarkets MB principal consultant Amy Bennett added.
Manganese ore market looks set for downturn:
A downbeat outlook from some manganese panelists sapped confidence in the short-term outlook for the market among audience members.
