Short-term Tungsten Price in China Is Likely to Rise

Analysis of latest tungsten market in China from Chinatungsten Online: Domestic tungsten market runs steadily after the New Year. Affected by the tax law of environmental protection, some traders have strong rised mentality. While the less trading volume and funding issues still exist, tungsten companies are caught in heavy wait-and-see atmosphere on the whole, waiting for the new guide prices from Tungsten Association and large enterprises.

In terms of supply, due to policy and seasonal factors, the production cost of smelting enterprises is increasing, and the supply of raw materials remains tense. On the one hand, the implement of new environmental tax law would cause some pressure on the cost of production of small and medium enterprises. According to relevant people, with the promotion of supply-side reforms, upstream environmental protection equipment industry sees a jump in sales in the second half of 2017; on the other hand, the problem that enterprises discharge pollutant without permission or beyond pollution limits to maximize their profits is gradually exposing in the dry season. Under the high pressure of strict environmental protection, production in part of small and medium enterprises is limited. Coupled with stopping works to undergo repair of mines around the Spring Festival, supply of raw material will maintain tight.

As for the demand, the continuous rise of raw material price hurts purchasing enthusiasm of customers and fewer orders of terminal products squeeze profits of alloy and products enterprises. Besides, downstream market remains low capacity for consuming raw material. Though rigid demand still supports the market, middlemen have no willingness in stocking in the short term.

Taken together, opening in 2018, the deadlocked relationship between supply and demand in the tungsten market is continuing. But as supply side of raw material and costs have taken the control, short-term tungsten price is likely to rise. And the new round of guide prices is expected to rise slightly but with limited space.

Prices of tungsten products on Jan. 03, 2017

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