Increase in Chinese exports weakens vanadium pentoxide prices in 2014

By IM Staff
Published: Friday, 20 March 2015

Prices fall in wake of extra Chinese capacity with Metal Bulletin index hovering at $4/lb V2O5. Glencore output drops on maintenance outage.

Anglo-Swiss trading giant Glencore Plc said in its preliminary 2014 results that while vanadium pentoxide (V2O5) prices held steady in H1 2014 as expected, this trend did not continue into the second half of the year. 

Planned Brazilian and Australian production did not materialise last year, which helped support prices, but this was offset by the emergence of extra Chinese V2O5 production. 

V2O5 is principally used as a steel additive – around 90% of the market – and has a small but growing market in the vanadium redox battery (VRB) industry. Steel manufacturing has been slowing, however, while VRBs are still in their infancy.

Metal Bulletin’s (MB) pricing database indicates that vanadium V2O5 prices held steady in 2014 until November, when selling values began to fall. MB’sprices for vanadium ore (pentoxide) (min 98% Europe), stand at between $3.75/lb ($8.25/kg) and $4.05/lb ($8.91/kg). 

Glencore produced 9,435 tonnes V2O5 in 2014, down 4% y-o-y, owing to an annual maintenance shutdown.

Largo signs bridging loan; VanadiumCorp delivers resource

Largo signs bridging loans

Canada-based, Largo Resources Ltd has secured a Canadian dollar (C$) 12m ($9.4m*) bridging loan for its Maracas Menchen V2O5 mine in Brazil, which commenced production in August 2014.

Glencore has an exclusive offtake agreement for Maracas’ production, but the company is still sourcing funds from other partners. Signed with Arias Resource Capital Management, the loan facility has an interest rate of 20% per annum.

Largo said that it will need to raise more equity capital to restructure its debt. The company plans to improve recoveries for
its leaching system, which, with additional capital expenses, will result in a bill of around C$20m for 2015.

Maracas is being ramped up to a phase one capacity of around 800 tpm and the company is targeting 2015 production of 7,710 tonnes.

VanadiumCorp delivers 28.4m tonne resource estimate

Vancouver-based VanadiumCorp Resource Inc. has reported an inferred resource for its Lac Dore East deposit in Quebec, Canada, totalling 28.4m tonnes magnetite concentrate grading at 1.09% V2O5.

The company has thus far recovered vanadium pentoxide from the resource with a 95% yield.

VanadiumCorp’s resource drew on data from several programmes, including government drilling in 1970, SOQUEM drilling in 1980, trenching and drilling by McKenzie Bay Resources from 1997 to 2002, and Apella Resources, which is now Vanadiumcorp in 2013.