Chinese vanadium pentoxide (V2O5) producers may be unable to achieve their scheduled production ramp-up plans in 2019 due to cost pressures stemming from the comparatively low V2O5 price so far this year and persistent stringent environmental inspections across the country, market sources told Fastmarkets MB.
Many Chinese V2O5 producers planned to ramp up their operations in 2019, encouraged by handsome profits achieved in the past year when the vanadium price hit a record high thanks to expectations of a big increase in demand for the material after China's new rebar policy came into effect on November 1, 2018. The rebar policy requires domestic Chinese mills to utilize greater volumes of alloys such as ferro-vanadium to meet the revised tensile strength requirements, and therefore was expected to generate greater demand for vanadium products as a result. Benefiting from the predicted rise in demand following the new rebar policy, the export price for V2O5, min 98%, fob China recorded an all-time high of $31-33 per lb last October, Fastmarkets MB data shows. Some market participants spoken to by Fastmarkets say Chinese V2O5 production will increase by 20,000 tonnes from vanadium slag and by 9,600 tonnes extracted from stone...