Tungsten Price Surge Challenges Smelters Amid Environmental Pressures and Economic Uncertainty

Analysis of latest tungsten market from Chinatungsten Online

According to Chinatungsten Online, the current tungsten price surge can be traced back to mid-November last year. As of now, the price of tungsten concentrate has increased by nearly 16%, with an 8.7% rise since April. Currently, some holders are quoting 65% black tungsten concentrate at around $19,714.3/ton.

Against the backdrop of the current strong tungsten prices, smelters generally express significant pressure. Although the price of ammonium paratungstate (APT) has risen by over 14% since mid-November last year, with an increase of nearly 8% since April, the current price has reached its highest level in over a decade.

Chinatungsten Online research reveals that pressure on APT smelters stems from ore cost on one hand. The current tungsten price surge is primarily driven by the price of raw materials, with limited actual consumption in the market. Under the background of speculative price hikes in raw materials, consumer enthusiasm for market entry is weaker. Consequently, many companies are executing long-term orders, with few new scattered orders seen. However, the rapid increase in tungsten ore prices in a short period of time cannot be timely reflected in long-term orders at smelters, leading to a phenomenon of buying high and selling low at factories over a certain period, significantly pressuring operating costs.

On the other hand, APT smelters are facing high environmental pressure. The costs of a series of environmental renovation projects such as desalination of wastewater and carbon emissions requirements are relatively high, especially for small and medium-sized smelters, making it difficult to bear. However, considering the downstream consumption capacity and acceptance willingness, it is difficult to fully pass on these costs to product prices.

Under the influence of difficult ore extraction and environmental pressure, some smelters have increased their production reduction and wait-and-see stance recently. Representative industry insiders have stated that with the current high ore prices, an APT price of $339.0/mtu is not unreasonable, aligning with reasonable cost levels in terms of environment, equipment, labor, and raw materials. However, due to limited demand and expanding capacity, the value of APT is not ideal.

Additionally, the unstable environment of international trade poses challenges to manufacturing consumption and the business activities and decisions of tungsten industry enterprises. The IMF's latest World Economic Outlook predicts that Asian economies will grow by 4.5% this year, lower than last year's 5.0%, but 0.3 percentage points higher than the upward revision in October last year. At the same time, the IMF urges central banks in Asian countries to pay attention to domestic inflation and avoid excessively linking their policy decisions with the expected actions of the Federal Reserve.

Prices of tungsten products on April 26, 2024

Picture of tungsten carbide mould

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