Vanadium Market Update (September 19, 2012)

Chinese vanadium pentoxide (V2O5) 98 percent is trading below its August average, according to data from Metal-Pages. So far, the average price for September has been between 63,000 and 65,000 yuan per metric ton (US$9,970.07 to $10,286.57), compared with the August average of 64,555.56 to 66,555.56 yuan per metric ton ($10,216.24 to $10,532.75). Prices for both months are still well below the 77,000 yuan ($12,185.63) level seen in April and the 82,000 yuan ($12,976.91) level seen in October 2011.

Vanadium pentoxide fused-flake 98 percent minimum in Europe is also trading slightly below its August average this month. For September it has averaged about $5.30 to $5.40 a pound. In August, it averaged $5.31 to $5.43 a pound. Prices are still significantly below the $6.75 a pound level seen in October 2011.

A Beijing-based trading firm told Metal-Pages that current prices for vanadium pentoxide are very low, adding that the company will suspend vanadium pentoxide flake operations if prices continue to fall. Market participants said they see prices for vanadium pentoxide flake stabilizing in the near term because current prices are below production costs.

Company news

Largo Resources (TSXV:LGO) plans to produce vanadium pentoxide for the first five years of operations at its Maracas site in Bahia, Northeast Brazil, following the publication of a technical report.

Toronto-based Largo said that under revised plans it plans to annually produce 9,200 tonnes of vanadium pentoxide in the first five years of operations. Average vanadium pentoxide operating costs are estimated at $3.12 a pound.