A decline in output from the automotive market in Europe has negatively affected demand in the vanadium and ferro-chrome markets, with prices for both materials falling to multi-month lows.
From January to April 2019, demand for new cars in the European Union decreased by 2.6% year on year to 5.3 million units registered in total, according to the European Automobile Manufacturers Association (ACEA).
Over the first four months of this year, new car registrations declined by 4.6% in Italy, by 4.5% in Spain and by 2.7% in the UK year on year, while registrations in the German and French markets remained almost flat.
The lack of demand in Europe has been the biggest drag on the region’s vanadium prices since the beginning of the year, with lower car production and sales globally already negatively affecting Russian vanadium producer Evraz’s vanadium product sales in the first quarter of the year.
The price of ferro-vanadium in Europe has fallen by more than 70% from the all-time high of $126-128 per kg reached in November last year to its lowest level since July 2017.
Fastmarkets assessed the price of ferro-vanadium, 78% min, delivered duty-paid in Europe at $32.50-35.50 per kg on Wednesday May 22, down from $35-36 per kg on May 15. Prices have fallen more than 50% from $70-76 per kg on January 2 at the beginning of the year.
The European vanadium pentoxide price has also been under pressure amid the continuous slide in the ferro-vanadium market.
Fastmarkets last assessed the vanadium pentoxide, min 98%, in-warehouse Rotterdam price at $7.20-7.50 per lb on Friday May 17, declining from $7.90-9 per lb the week before on May 10, with the market now trading at its lowest level since October 2017.
“Demand is just not there and there is plenty of material around in Europe,” a vanadium trader said. “The production cost is still below the current price and producers can afford to lower their prices to secure sales,” the trader added.
