Is the Rising APT Price Caused by Environmental Inspection?

Recently, the global tungsten market has seen a scene of rise and fall. On the one hand, the price of ammonium paratungstate(APT) continues to highly rise up. On the other hand, the price of tungsten concentrate is cooling and weak. In order to trace this wired phenomenon, people have turned their attention to the world's most important tungsten production center - Ganzhou, Jiangxi, where the region is conducting more stringent environmental inspections.

Therefore, the international spot market and China's export prices of APT had been rising due to concerns about supply disruptions caused by ongoing environmental inspections. Until May 21, the European market evaluated that the price of APT(88.5% WO3 ) would be 340-345 US dollars / mtu, compared with the previous week 330-335 US dollars / mtu increase of about 1.4%, has been rising for more than a month. Although the demand is still very weak, the rising APT price continues in the tungsten trading market. Therefore, People have been taking the initiative to make a deal.

Last weekend, tungsten and molybdenum expert of China Tungsten Online visited a number of tungsten refineries in Ganzhou. According to their saying, the suspension or production reduction of refineries caused by the environmental inspection, will last at least 2 months. The detail is: The environmental protection department had prohibited the APT refineries to palce smelting furnace slag in external sites. So the refineries had stored the slag in the warehouse. Due to the sudden inspection, most of the refineries were not fully prepared. Now that some refineries’ warehouses are almost full. They had to stop production until they find a way to deal with stored slag or find other warehouses. It is estimated that it will take at least 2 months to deal with them. Jiangxi Tungsten, Xiamen Tungsten and Zhangyuan Tungsten had faced the similar problem. Therefore, experts believe that the current APT offer will soon enter the 180,000 RMB / ton range, and may further rise to the 200,000 RMB / ton range.

The suspension of APT refineries led to the chaos of the tungsten supply. On the one hand, the downstream demand for APT raw materials was processed. On the other hand, the upstream tungsten concentrate began to be unsalable. Due to the rectification of the refinery, the demand for tungsten concentrate was weakened, resulting in the low price of tungsten concentrate. In my opinion, the current price of tungsten concentrate is still around 110,000 RMB/ton. Although it doesn’t have a rising price like APT, it is currently stable.

Although the China-US trade war seems to have come to an end, the current joint statement issued by the two Countries doesn’t give a clear declaration. But there is no wrong to keep a positive thinking. Yesterday, tungsten and molybdenum expert from China Tungsten online reminded us to pay attention to the recent exchange rate trend and Fanya Metal event. He believes that the recent exchange rate of the RMB against the US dollar will fluctuate frequently, and the pressure for appreciation is huge.

In addition, Fanya Metal Exchange still has tens of thousands of tons of APT stocks stranded. It is understood that the purchase cost of these APT stocks is about 170,000-180,000 RMB/ton, which is close to the current market transaction price. In addition to the warehousing costs in recent years, it’s not excluded that relevant units might release their storages to market at a suitable time, as the reduction of APT production by environmental protection policies continues to stimulate APT prices. 

• < Prev
• Next >