Ammonium Paratungstate (APT) Prices Likely to Rise in 2013; Friction Remains between Europe and Asia

Ammonium paratungstate (APT) prices should begin to rise in 2013, which is noted by Brian Wesson, ceo and president of tungsten junior miner Woulfe Mining.

There has been mounting tension between some sellers in Europe and China, as the only concluded business has been coming into Europe at lower and lower numbers, while Chinese market participants have begun refusing to sell below about $340.00/mtu. APT prices from mainstream website currently stands at $280.00-310.00/mtu, after weeks of almost non-existent trading, in which only small parcels were sold. 
“The long-term price will be about $300.00-330.00/mtu. We will see it getting higher,” Wesson said.
“It backed off mostly because of a bit of softening in China, but everybody believes China will move back into a big growth phase,” he added.
Tungsten prices, in general, have been resilient during the most recent financial crisis, according to Wesson, as the material has remained in relatively high demand from the steelmaking industry.
However, the market has been particularly illiquid in recent months, as buyers hold back on macroeconomic uncertainty, exports from China diminish, and sellers wait for some improvement.
“[China] put an export tax on it and with most business coming out of China, that made it very, very difficult,” Wesson said.
“They’ve been using more and more [APT], and I think they’re going to become a net importer of tungsten. That leaves a big gap in the Western world,” he added.
This gap should be supportive of prices, furthermore, as a lack of supply will allow sellers in Europe to push levels up.
“We still believe the outlook for tungsten is very strong. [There was a report] that gave us a prediction for $390.00/mtu. If you don’t have tungsten, you can’t [replace it],” Wesson said.
“There has been a lot of friction in the market,” he added. “But people still used tungsten when we had the financial crisis and the price was quite steady.”
Wesson is also expecting stimulus in China, coupled with structural issues at tungsten mines, to be supportive of the price.
Furthermore, excluding Woulfe Mining, which will begin production in about 12 months, there is very little new supply coming on-stream.
“There are very few new players [apart from us]. We’re ready to start mining ore – we just need to build the processing plant,” Wesson said.
In the meantime, however, the friction between participants in China and Europe is likely to continue until the first quarter of next year and possibly beyond, as new business has yet to be concluded at levels above Metal Bulletin’s range.