Price Of Ferro-Vanadium Rises To Higher Level Of US$87 / Kg. With Sight To Reach US$100 = Evraz Is Strengthening Structure To Monopolize Vana Market, Causing Speculative Price A steep rise of price for ferro-vanadium is unable to stop. The price of ferro-vanadium in Europe prevailing in this week is in the range of US$77 per kg. of V at a lower side and US$87 at a higher side and is still in the mood to rise further. Apart from US$130 per kg. as recorded in April -June quarter of 2005, this tone of price for ferro-vanadium is enlarging a possibility to rise the price to a level of US$100.
For a reference, the price of ferro-vanadium as of January of 2008 was in the range of US$40 -49 per kg. of V and, therefore, the current prices have risen by US$37 - 38 per kg. just in 2 weeks. Namely, price of ferro-vanadium has already entered into an aspect of speculation.
The reason is that price of ferro-vanadium in the course of 2007 was maintained on a high level and moved in the boxed range of US$41 at a higher side and US$35.70 at a lower side. However, in mid January of 2008, South Africa, a major country to produce ferro-vanadium, has faced a shortage of electricity supply, causing to anticipate the cutback on production of ferro-vanadium, and price of ferro-vanadium has suddenly turned to move on a speculative tone.
South Africa has held the capacity to produce 60 million lbs. per annum of vanadium on content base, sharing more than 30% of the world demand for vanadium. At present, it seems to be inevitable to reduce the production of ferro-vanadium in South Africa by 10 - 20% for a short supply of electric power. In addition to this aspect, it has been informed in Europe that Evraz, a leading steel company in Russia, is now moving to take over Tulachermet, which is a major producer of vanadium in Russia. Consequently, a speculation to make a further oligopoly for supply of vanadium has come up to the surface. Evraz has been selling vanadium slag, generating as by-product in the course of producing pig iron, to Tulachermet but there is a view in the market that, in order to produce vanadium through the consistent process, Evraz is moving to take over Tulachermet. Tulachermet has held the capacity to produce 33.0 million lbs. per annum of vanadium in vanadium pentoxide. For a reference, according to the annual report released by Evraz, this company produced 11,752 tons of vanadium in vanadium slag in the calendar year of 2007.
Evraz has also acquired Highveld Steel & Vanadium ( Highveld ) of South Africa as their subsidiary and Highveld has held the capacity to produce 53.0 million lbs. per annum of vanadium in vanadium pentoxide. Accordingly, in case of that Evraz is able to fully control Tulachermet, the parties concerned have an opinion that the structure to monopolize vanadium production will be strengthened further.
However, European Commission ( EC ) has felt an anxiety for the oligopoly of the vanadium market by Evraz, enabling them to control vanadium prices, and ordered Evraz in 2007 to separate and sell Vanadium Division of Highveld. The matter of this sale is scheduled to be determined by April of 2008. Nevertheless, the matter to separate and sell Vanadium Division of Highveld was already postponed by two times ( by December of 2007 and by January of 2008 ) to have a conclusion. Under the circumstances, in the middle of negotiating with EC, the movement to take over Tulachermet by Evraz will concentrate further an attention on the market, causing a sensitive fluctuation of vanadium prices, and one instance is to rise steeply price of ferro-vanadium. last modified : Thu 14 Feb, 2008 [10:51
TSL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
