Throughout 2016, ferrovanadium prices recovered having started the year at their lowest levels since 2003. In H1 2017, steady price recovery continued with prices averaging US$25/kg in Q1 and increasing to US$27/kg in Q2. It had looked like modest increases were set to continue into Q3, with July prices averaging US$28/kg. But in late July and early August, prices surged to levels above US$40/kg. Why?
Developments in China are the principal factor behind the price spike. Limited feedstock, diminished stocks and upcoming environmental inspections in China have meant that access to vanadium units is tight, although some consumers in China have told Roskill that the issue of material availability should not be overstated and that vanadium units are readily available for the right price. Concerns over availability have spread along with the news that some operations in China will suspend some production. A flurry of purchasing and restocking has ensued which has helped to drive prices higher.
Other China-related issues may also have influenced sentiment. Reports suggest that China will ban imports of vanadium slag (grading lower than 20%) which could limit feedstock levels if such a ban is enforced. Further, reports suggest that new rebar policies may have a positive impact on vanadium demand over the coming months and the continued hype over vanadium redox batteries continues to support the view that long-term demand for vanadium will be robust.