U.S. Tungsten Carbide Scrap Market Holds Firm in October

U.S. tungsten carbide scrap prices held firm in October, with rising intermediate costs partially offsetting supply tightness, but prices hovered near seven-year highs due to logistical constraints and steady demand.

The monthly tungsten carbide scrap inserts and round prices assessed by Argus on Oct. 29 were unchanged from the previous month at $10.50-$11.25/lb, compared with a 41-percent increase from $7.70/lb in January. Prices have hit their highest price since the market averaged $13/lb on Sept. 30, 2014.

Traders noted multiple spot transactions in October in the U.S. within the current range. Large processors and end-users were quoted as low as $10.50/lb and as high as $12.50/lb for sorted processed lots over 5,000 lbs. Spot liquidity varied on a case-by-case basis as some dealers traded large volumes of scrap during the month, while others noted limited end-user demand. However, traders indicated that supply was still on the rise during the month.

Rising intermediate costs could make cemented carbide scrap the raw material of choice for end users, market participants say. One APT producer received a quote of about $23/kg for solid scrap this month and said that while prices are higher than earlier this year, supply has increased. Intermediate producers also noted that tungsten demand remains strong for the first half of 2022 as "consumers are trying to buy as much as possible" to avoid shipping delays, a market participant said.

Lack of timely supply pushed up intermediate product prices, supported by higher export prices in China. Curbs on energy consumption in key production regions Jiangxi and Henan raised input costs in China as tight supplies of intermediate products pushed up the price of virgin materials. Ammonium paratungstate (APT) (per ton of WO3) prices in Rotterdam rose from $313-316 per ton on September 30 to $320-325 per ton on October 29.

On October 21, APT export prices increased to US$310-315/t (fob) from US$305-310/t (fob) on October 6. On October 29, Chinese export prices for tungsten carbide powder (W99.7pc) increased from US$40.00-41.00/kg (US$18.60-19.05/lb) on September 30 to 41.00-42.00 USD/kg.

U.S. tungsten carbide scrap suppliers highlighted unrealized demand in aerospace and automotive end markets. Aerospace demand has recently begun to recover as Boeing begins to clear its inventory, while automotive production is being hampered by a global shortage of semiconductors.

A large part of the market has also noted that the upturn may slow down as the year comes to a close. The last two months of the year are typically less active as traders sell inventory to meet quotas and companies try to minimize inventory overhang as they head into the new year. In addition, more companies taking vacations for the holidays will affect spot liquidity.

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