Ferro-Alloy Resources Ltd (LSE:FAR) has reassured that long-term prospects for vanadium and nickel remain strong, despite a recent dip in prices.
Reporting on fourth-quarter trading, the vanadium developer said a drop in prices and production shortfalls had meant revenue and profitability came in lower than expected.
Vanadium hit a recent low of US$5 per pound, Ferro-Alloy said, having sat at US$8 at the start of the quarter.
Decreased demand also saw the prices of ferro-molybdenum and nickel hit lows of US$40.00 and US$15.87 per pound respectively, after entering the quarter at US$54.50 and US$20.45.
This, coupled with a squeeze on margins after the company procured concentrates based on higher prices earlier in the year, has hit revenue.
“One of the challenges of the vanadium industry is the extreme volatility of pricing, where the current low price for vanadium [...] is, unfortunately, beyond our control and is having a negative impact on all producers,” chief executive Nick Bridgen said.
New types of concentrate are being experimented with, which could prove more profitable, the company said.
Alongside this, focus remains on the completion of a feasibility study at the Balasausqandiq vanadium deposit, Ferro-Alloy added.
“The longer term outlook for vanadium, regarded as a critical metal by the UK, EU and the US, remains highly encouraging,” Bridgen added.