Chinese vanadium producers are expected to forgo their annual supply agreements with European buyers from 2018, prioritising domestic sales instead, according to market participants spoken to by Metal Bulletin.
“The market looks like it will be structured very differently in the next few years, albeit with very healthy prices,” one trader told Metal Bulletin.
Provided the revision that changes the standard tensile strength of rebar products is approved and implemented as expected, it looks set to provide a long-term boost to China’s vanadium demand.
The new rebar standard is forecast to increase China’s vanadium consumption by 30%, or 10,000 tpy, tightening supplies, supporting domestic prices and incentivising domestic business in the process.
“There is certainly less impetus to export,” a second trader said.
“Most probably, the Chinese will do less [business] on long-terms to the European trade market next year,” a distributor added.
The supply vacuum will leave European buyers jostling to...