Ann: Major Project Status Awarded to Australian Vanadium Project, page-98

The Chinese vanadium market is in stalemate right now. Pricing for VN and FeV is set by the steel mills. Steel mills bid for the vanadium product and the highest bidder takes it. Understandably, all mills are reluctant to raise prices to keep costs down, and so the price remains suppressed. As mentioned earlier, VN production is up 67% y/y and there currently seems enough to go around, so the pressure remains off the steel mills for now.

V2O5 producers (from slag) are low on inventory and running at max capacity. There are also only 7 major producers from slag in China, which makes collusion to set the price relatively straight forward. Given the evident tightness in V2O5 supply, these producers are reluctant to lower prices.

It is therefore the FeV and VN producers who process the V2O5 that are currently getting squeezed. Margins are very tight and many firms are currently loss making.

It’s not straight forward to forecast exactly how this shall play out, either steel mills remain resolute and V2O5 supply increases from somewhere unforeseen or maybe demand drops due to falling steel output..... or V2O5/VN/FeV production fails to keep up with increasing demand. FeV and VN plants may have to close because they are loss making, while there may also be a simple case that sources of V2O5 supply can’t keep up with demand (as suggested by FerroAlloyNet’s apparent deficit) unless prices increase to incentivise higher cost stone coal producers to come online.