Vanadium Market Update (August 15, 2012)

Chinese vanadium pentoxide (V2O5) 98 percent is trading below its July average, according to data from Metal-Pages. So far, the average price for August has been between 65,500 and 67,500 yuan per metric ton, compared with the July average of 67,555.56 to 69,444.4 yuan per metric ton. Prices for both months are still well below the 77,000 yuan level seen in April and the 82,000 yuan level seen in October 2011.

Vanadium pentoxide fused-flake 98 percent minimum in Europe is also trading below its July average this month. For August it has averaged about $5.33 to $5.48 a pound. In July, it averaged $5.43 to $5.71 a pound. Prices are still significantly below the $6.40 a pound level seen in October 2011.

Company news

Australia’s new vanadium producer, Atlantic (ASX:ATI), secured new financing for the ramp-up of its Windimurra vanadium project. The Perth-based company signed an agreement with Droxford International, its largest shareholder, for a new convertible bond facility of up to $50 million. The agreement provides Atlantic with much-needed working cash flow; at the end of the last quarter most of the company’s cash reserves were tied up in interest payments on earlier financing.

Atlantic acquired 100 percent of the Windimurra vanadium project, located in Western Australia, in 2010 and started production in January of this year. It plans to reach 6,300 tonnes per annum of vanadium in the first quarter of 2013 and expects to meet about 7 percent of world demand.

Securities Disclosure: I, Karan Kumar, hold no direct investment interest in any company mentioned in this article.