Evraz, a major steel company in Russia, attempted to set up their strategy for global domination in the market of vanadium but this matter has been braked in 2007. The European Commission ( EC ) ordered Evraz to sell the Vanadium Division of Highveld Steel & Vanadium ( Highveld ) in South Africa, which Evraz has taken over in autumn of 2006, and Evraz has agreed to this sale in August of 2007.

The sphere of influence on the vanadium market grasped by Evraz has shared more than 50% of the world
production and an anxiety, which Evraz is thought to strengthen further their power to control vanadium prices, is anticipated. Therefore, EC ordered Evraz to separate the assets of Vanchem Refinery and Vanadium Mine in Highveld to the third party. The sales of these vanadium assets were initially targeted to be materialized by December of 2007 but has
been postponed to the 20th January of 2008 and there is a big probability to extend a final decision of these sales to the
middle of 2008. According to a view from the parties concerned, a dominant enterprise, intending to take over the
Vanadium Division of Highveld, is supposed to be a Russian capital and this respect will be the reason to prolong a final
decision of the sales.
For a reference, as for the Ferro-Alloy Division of Highveld, Evraz sold in the second half of 2007 (1) Transalloys ( a producer of manganese ferro-alloys ) to a Russian enterprise of Renova and (2) Rand Carbide ( a producer of ferrosilicon) to Silicon Smelters of South Africa ( under control of Ferroatlantica in Spain ) respectively.

Even if Evraz could sell the Vanadium Division of Highveld, Evraz is in a position to sell 33.0 million lbs. per annum
of vanadium slag produced at Transvaal Steel Works of Highveld, 9.0 million lbs. per annum of vanadium produced by
Stratcor of the USA and 33.0 million lbs. per annum of vanadium supplied by Tulachermet Steel Works of Russia, totaling to 75.0 million lbs. per annum of vanadium ( on vanadium pentoxide base ). The world output of vanadium in 2007 is estimated at 213 million lbs., having increased by 6.5% compared to that in 2006, and Evraz has still held a power to share 35% of the whole as the largest supplier of vanadium in the world. Therefore, it is not negligible that Evraz has a power to influence on the market of vanadium.

Following the extraordinarily risen prices of vanadium products as seen in 2005, vanadium prices in the world had
been stabilized in 2006 and 2007 and moved in the boxed range. The annually averaged price ( per lb. of V ) of vanadium pentoxide, as raw material for production of ferro-vanadium, in the last 3 years was <> 2005 : US$16.26, <> 2006 : US$7.86 and <> 2007 : US$7.39. Also, the quarterly moved price ( per kg. of V ) of ferro-vanadium in 2007 was <> January - March quarter : US$29.50 - 40.00 ( compared with US$37.00 - 46.00 in the same quarter of 2006 ), <> April - June quarter : US$41.00 - 37.50 ( US$36.00 - 41.00 in 2006 ), <> July - September quarter : US$36.50 - 28.50 ( US$35.00 - 40.00 in 2006 ) and <> October - December quarter : US$37.00 - 38.00 ( US$31.00 - 38.00 in 2006 ).

There is an opinion in the market that the reason, why price of ferro-vandium in the world had fluctuated without
any serious fault in the boxed range of US$30 - 40 per kg. of V during a period of 2006 to 2007, was due to the strategy taken by Evraz as the largest share holder of vanadium, having aimed to stabilize vanadium prices. The matter, to which EC has attached an importance, is thought to be the leadership of vanadium prices by a giant enterprise and it seems that EC wants to avoid the soared vanadium prices as arisen in 2005.

The parties concerned have a view that, in order to prevent a fall of price for ferro-vanadium, the safety net for
its price has existed. Namely, it is ferro-niobium as a rival to ferro-vanadium. Brazilian ferro-niobium has succeeded to
penetrate into the market of ferro-vanadium ( particularly in China ) by means of developing amazingly the market for
ferro-niobium. However, the price of Brazilian ferro-niobium sold to regular consumers in October - December quarter of 2007 had stayed on a level of US$28 per kg. of Nb. Since a leading producer of ferro-niobium abolished to publish their listed price of this ferro-alloy from 2006, price of ferro-niobium started to rise in accordance with the market principle and has doubled from a level of US$14.50 at that time.

However, steel companies of Japan calculated the comparative merits between ferro-niobium and ferro-vanadium
and, according to its estimation, the merits correspond to the former of 1 against the latter of 1.5 in many cases.
Therefore, when price of ferro-niobium is on a level of US$28, the case to use ferro-vanadium even at approximately
US$40 will be able to see a certain merit. If price of ferro-vanadium falls to a level of US$30, a merit to use ferrovanadium will revive and cause to rebound its price. However, reflecting the effect which a Brazilian producer has
expanded in advance their capacity to produce ferro-niobium, the supply of ferro-niobium from Brazil was able to comply with the niobium demand in 2006 and 2007 but the capacity to supply ferro-niobium has reached a limitation in the second half of 2007 and, until the second half of 2008 when this Brazilian producer is scheduled to complete the structure to increase their production of ferro-niobium, the supply situation of this ferro-alloy has maintained a tightness. 
In addition to the supply situation of ferro-vanadium, a factor to push up price of ferro-vanadium is an aspect on supply of ferroniobium, which is thought to be not negligible.

While new production of vanadium in Western Australia has been marked, the Windimurra vanadium project in
Western Australia is expected to be resumed in the first half of 2008. The reason is the financial assistance new shares to be issued in amount of A.$54.8 million ) by a Hong Kong based capital - Noble ( having acquired 10% of
the issued shares of this project ) and Territory Resources of Australia.

For a reference, China, where is one of major countries to produce vanadium, has decided to restrict vanadium
exports. The Central Government of China so far adopted the comparatively mild regulations for exports of vanadium
products but has enforced from the 1st January of 2008 (1) to impose newly the duty of 5% on exports of vanadium
pentoxide from China and (2) to raise the duty on exports of Chinese ferro-vandium ( including others ) from 10% as so
far imposed to 20%. However, the duty on exports of ferro-vandium with 75% V content has been revised and became
nil from 10% as so far imposed. China returned to the country to export again ferro-vanadium from 2006 but the exports
of Chinese ferro-vanadium in 2007 decreased to half of that in 2006. A trigger for this sharp decline of the exports in 2007 was to due the prohibition of conversion trade on consignment base.

In China, Panzhihua Steel constructed one new blast furnace to increase their production of vanadium slag from
2006 and Chengde Steel is scheduled to materialize in 2008 their plan to construct one new blast furnace for production
of vanadium slag. Accordingly, China is on a basic tone to increase vanadium production but busy to follow the active
demand for vanadium from domestic market.

Over the last two or more years having written extensively about Molybdenum, I currently see a very similar pattern evolving in another sector, and for many of the same reasons. The next hot ticket mineral is going to be "Manganese" (Symbol-Mn). Manganese is a major Steel & Iron industry ferro-alloy component (the primary use of Mn) and a very strategic minor metal in an extremely wide variety of applications. Some of the more standard uses include the chemicals industry, dry cell batteries, fertilizers, feeds, glass making, paints, varnishes and medicinal uses etc. First recognized as an element in 1774 by Swedish chemist C W Shule, Mn was in 1882 found to be of key importance in the production of steel by one Robert Hadfield. Manganese having been long ago classified by the US Gov't and some other nations as a strategic metal during wartime has placed Mn production & exploration in varying degrees of importance over the last 100 years. Currently there appears to be no new Mn mines coming forward and after watching the price increases over the last few months, I believe there is now a severe shortage of production on the horizon. *Note* Today alone the Mn price took a hike of $1450 p/metric tonne to $5500 p/mt from $4050 p/mt yesterday. That is an increase of $1450 in ONE DAY. (Source- www.Indianmetals.com)

Earlier I mentioned a similar pattern evolving between Molybdenum (Mo) and Manganese (Mn). In that context I see "China & India as well as other emerging growth nations coupled with the subsequent booming price of Nickel, & factoring the rapid growth in Iron & Stainless Steel production all having a profound forward effect on Mn prices." Nickel is rapidly pricing itself out of many equations and more and more new applications are coming forward for metals like Mo & Mn. As we have seen recently, China in their quest to hoard metals and resources, has now placed a number of "export taxes AND quotas" on many metals. Export taxes for ores of manganese, cobalt, nickel, chrome and molybdenum (including concentrates and roasted moly oxide) will now be increased to 15% from 10%. Worldwide suppliers of size in the Mn markets are China, Russia, Ghana, S Africa, Gabon, Chile, Australia, Brazil & India. Here we may note that in what we consider the free world and stable government environments there are a few countries whose Mn mines I myself would not invest in. In the USA today there are no Mn mines currently in operation. Russia holds what many consider to be the two largest Mn deposits and China produces a reported +/- 42% of world production of Mn. NOTEWORTHY also is the fact that there are NO known substitutes for Mn in the Iron & Steel industry, and EVERY bit of Iron or Steel production needs Manganese to alleviate brittleness.

25 Jul 08 - Manganese offers remain high at around RMB21,000/t (USD3,075/t) ex works with many suppliers hesitant to sell the material. However, sources reported to Asian Metal that few buyers are ready to accept prices higher than 20,500/t (USD3,001/t) ex works while in export market, suppliers raise their offers to USD4,000-4,100/t FOB with some deals concluded at around USD3,950-4,000/t FOB.

A Hunan-based smelter running at full capacity of 1,000tpm told Asian Metal that they failed to sell the material at prices above RMB21,000/t (USD3,075/t) ex works. "We don't think the supply is tight as many traders have large quantities of material at hand," said the source who claimed that the current price might not last for long. "Demand is usually not good in July and August."

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25 Jul 08 – Market participants reported larger deals being concluded in the European manganese market this week, when more traders believe that it is a good timing to book material for shipment to arrive after the summer holidays. According to market participants, manganese flake prices are in the range of USD4,000-4,100/t in warehouse Rotterdam, and Chinese offers in the range of USD4,000-4,100/t CIF Rotterdam.

A European trader holds manganese flake prices to be in the range of USD4,000-4,100/t in warehouse Rotterdam. He is also receiving Chinese offers in the range of USD4,000-4,100/t CIF Rotterdam.

The source revealed to Asian Metal that he bought a few hundred tonnes of manganese flakes at USD4,050/t CIF Rotterdam for delivery in August. “I believe it is a good timing to position for material as manganese metal prices are expected to increase.”

Another trader holds manganese flake prices to be in the range of USD4,000-4,100/t in warehouse Rotterdam. He is also receiving Chinese offers in the range of USD4,000-4,100/t CIF Rotterdam.
Asianmetal(English) http://www.asianmetal.com VQHC
He disclosed that he bought a few truckloads of manganese flakes at USD4,050/t in warehouse Rotterdam.

The source claimed that although demand is still quiet during the summer holidays, most traders are already booking material to position when demand gets better during the next quarter. “We are still receiving very few inquiries from consumers now, but we have to prepare in advance for the next quarter’s production demand.”

25 Jul 08 - Manganese market keeps moving up with the foreign buyers ready to order some material. The higher prices in European and Chinese markets are pushing Chinese suppliers to raise their prices. Sources reported to Asian Metal that offers from China are at USD3,950-4,000/t FOB.

A South Korean trader who is about to order some materials delivered to Europe told Asian Metal that they received offers of USD3,950-4,000/t FOB at the moment. "The Chinese suppliers raise their offers significantly due to the higher prices in foreign markets," said the source who claimed that the offers were around USD3,900/t FOB early this week.

The source claimed that some Chinese suppliers might be manipulating the market but as the supply is decreasing in foreign markets, many buyers are willing to replenish some stocks before the market goes stronger in August or September.

Another Indian trader just received an offer of USD4,100/t CIF Nava Sheva, about USD150-200/t higher than the last offer in the middle of the month. "Manganese price is usually changing rapidly and we are not ready to purchase any at the moment," said the source who claimed current price too high to make a deal.

The source learnt the supply in Chinese market is tightening but they think some Chinese suppliers must be keeping the material for higher prices. "No buyer will purchase large quantities of the material in summer," said the source.