Chinese suppliers' views about REACH Regulation

The new European law on chemicals, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), entered into force on 1 June 2007. Chinese suppliers worry that the Regulation will affect their business of vanadium pentoxide with European traders. At this point, Asian Metal exchanged views with some Chinese suppliers about the Regulation.

A Sichuan-based producer, with an output of 150tpm of ferrovanadium and vanadium pentoxide, usually exports vanadium pentoxide and ferrovanadium to European markets, believing that it is difficult to predict how much the Act will affect their business. "If European traders import vanadium pentoxide or other chemical products from foreign markets, they must register and pay a few dozen thousand Euro to the government," said the producer.

According to the source, Chinese suppliers who sell vanadium pentoxide to European consumers directly must register and pay the money, but suppliers who sell to European traders need not to do that.

Selling vanadium pentoxide for USD7.3-7.4/lb and ferrovanadium 80% for USD37/kg in export market, the source thinks the Regulation will make European market to be shared by some big traders, and small traders will have to exit the market in future.

Meanwhile, a Liaoning-based supplier who usually exports 3-4 containers of vanadium pentoxide to Europe each month also heard the Regulation, but believes that the Regulation will not affect their business greatly. "We do not only export the material to traders but also consumers directly, but the consumers will register, and we need not to worry about it," said the trader. But the source worries that European buyers will ask them to bear a part of the money they handed in to the government.

Selling vanadium pentoxide flake for USD7.4/lb in export market, the source thinks the market will move down slowly in the coming weeks.

However, participants believe the Regulation will not affect the business of Chinese suppliers greatly, because they can export vanadium pentoxide to the countries in East Europe firstly. The countries in East Europe are not restricted by the Regulation.

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