[Ferro-Alloys.com] The Chinese appetite for nitrided vanadium and unconfirmed reports that Evraz’s Vametco operation in South Africa has been producing slightly less Nitrovan have contributed to higher prices.

 

Nitrided vanadium has been tight since mid-2012, according to one trader. The one-month labor dispute in July-August at Highveld Steel and Vanadium caused a reduction in production of vanadium containing slag, which is used as feed by Vametco, but nitrided vanadium prices started rising long before the strike.

 

Rising demand for nitrided vanadium in China has sparked a surge in prices. Today nitrided vanadium prices in China are USD40 per kg compared to FeV prices of USD31.50. Chinese producers are loath to export nitrided vanadium given the price premium in China, and this has meant that Western consumers are even more reliant on production from Vametco.

 

Last week, a US trader said that the upcoming Chinese New Year had created a short-term supply dislocation because Chinese producers had halted exports. He emphasized, however, that there is no shortage. Vametco has always had access to ore from it vanadium mine in South Africa but it is far less costly to produce Nitrovan from slag, sources said. “Vametco was stuck between a rock and a hard place when Highveld had less slag to offer,” one analyst said.

 

In response to the reduced availability of vanadium-bearing slag, EVRAZ Vametco modified its ore-preparation facilities so that it can process more vanadium ore from the mine adjacent to the plant, Evraz explained. This move, the company concluded, will compensate for the loss of vanadium-bearing slag and allow the plant to generally meet customer requirements for Nitrovan. “Many consumers say they are stretched thin, but everyone has received contracted quantities. We haven’t heard of anyone being caught short.” a trader said. Evraz reported that vanadium in slag production from South Africa fell 21.3% in 2012 to 6,205 mt compared to 7,881 mt in 2011. Evraz’s total slag production (including production from Russia) rose to 21,060 mt in 2012 compared to 20,741 mt the year before.