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The ferrovanadium price increased to over 40 $/kg in July 2017 - Why did the price go up so sharply?
The price for ferrovanadium increased by more than 60% from around 25 $/kg in January 2017 to over 40 $/kg in July 2017. Meanwhile, vanadium pentoxide V2O5 prices have risen from $5.75 per pound to $9.50 since mid-July. The Metalshub team has analyzed the steel and vanadium market and summarized the key factors influencing the price increase hereafter.
Demand side
In 2016, the global economy stabilized. Driven by strong demand for steel, profits in the steel industry rebounded sharply. High profits stimulated mills to increase crude steel production. As a consequence, the demand for steel raw material increased.
Supply side
First, due to the maintenance of the furnaces, , a subsidiary of , decreased its vanadium production by 300-400 mt/month in July and August 2017.
Secondly, China stepped up its environmental protection efforts and a large number of vanadium producers in Panxi and Chengde had to stop production, especially in July and August 2017. According to , market participants are waiting to see if producers will be given permission to resume production in September.
Thirdly, the Chinese government is planning to change its vanadium slag import policy. Taking into account that the Chinese vanadium slag imports are about 50,000 mt, vanadium products supply is expected to decrease by 4,500 mt.