Tungsten More “Critical” on Expected Supply Shortage

At the Geological Society of South Africa’s 2013 GeoForum conference in Johannesburg last week, Core Consultants MD Lara Smith pointed at three metals (or groups of metals) that will be at a high risk of supply scarcity from 2015. Smith explained that while the European Union and US Department of Defense don’t wholly agree on all the metals they consider critical, tungsten, tantalum and rare earths are without a doubt at the top of both their lists.

Smith also said that in recent years, tungsten supply has not been able to keep up with rising demand, which has necessitated the sale of tungsten stockpiles by the Chinese, Russian and American governments. “Based on China’s decision to limit exports to the rest of the world, we estimate that the primary tungsten market is in deficit and, this year, we expect the deficit to be in the order of 15 000 t,” Smith warned at the conference.

A shortage of supply, though bad for the market, can definitely be good for prices. Tungsten APT prices are currently sitting at $400 to $410 per metric ton unit. It is reported that “Chinese tungsten APT prices have kept rising as smelters try to avoid APT production costs rising higher than sales prices.” Buyers, the smelters explained, are unwilling to pay more than 215,000 renminbi per tonne. Prices for tungsten APT 88.5 percent have climbed from last week’s 212,000 to 215,000 renminbi per tonne to 215,000 to 220,000 renminbi. So far this year, prices have climbed by 22 percent.

Meanwhile, European ferro-tungsten prices have also risen sharply following an announcement from Vietnamese producer YoungSun that due to power-related issues, it is uncertain as to when shipments will return to full capacity. YoungSun has confirmed that it will only be able to meet 50 percent of its deliveries for the remainder of the year. Prices for ferrotungsten min W 75 percent have risen from $47.50 to $49.50 per kilogram to $48.50 to $50.25 per kilogram.

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