Imminent Tungsten Shortage

Tungsten shortage coupled with environmental regulations in China with depleting mine supply, this may also create a tungsten deflect if new mines and projects aren’t brought online in these coming few years.

Global mine production of tungsten sipped in 2018 from 82,100 metric tons (MT) to 82,000 MT, despite tungsten demand growing by 5 percent year-over-year. This is also a main reason lead to the tungsten shortage.

Tungsten shortages crackdowns heaps in Jiangxi, Hunan and Fujian, these three places are China’s largest tungsten producing regions. These areas are also forced with some producers offline until their tungsten projects were deemed compliant with government environmental regulations. 

While the ecological concerns the environmental regulations are not the only issues plaguing Chinese tungsten producers as well as causing with the tungsten shortage. As tungsten mines are getting mature than before and the quality of their output declines. If tungsten output is cut or reduced in China, there are few ready to ramp up production in order to offset the tungsten shortage.

Vietnam is the second largest producer of tungsten after China, now also faces with the same mine supply issues. In 2017, the Vietnam produced 6,600 MT of tungsten, but this number dropped in 2018 to 6,000 MT and is likely to not grow. Masan resources is the leading tungsten producer in Vietnam, is already full of capacity and is increasing buying in concentrate in third parties to enable to raise its tungsten output from their chemicals plant. While all of these points required for developing new tungsten mines.

Despite the tungsten shortage, the tungsten uses in the automotive and aerospace sectors have grown over the last few years and are expected to continue with the tungsten has been a traditional uses of the metal. It’s may materialize a deficit. In addition, there is a large and stable demand base for tungsten in the tools sector the primarily for cemented carbide tools, but also other tool materials, like high-speed steels. Machining of automotive components is a large market for tungsten-containing tools.

Some experts in tungsten industry hold a hope that Russian production to increase in the short team to relieve the coming tungsten shortage issue. Although, many of the country’s established tungsten mines in that they are facing with depleting ore grades and will likely come offline, meaning new mines need to be developed in the following several years.

Although the tungsten shortage Imminent potentially. The ammonium paratungsten price has been very stable in the past 2019, but there are several factors that might drive the price higher for the rest of 2019. This factors include how quickly new tungsten mine projects will be developed and whether any of the ammonium paratungsten stocks will be released to the market in 2019.

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