China's Tungsten Producers to Cut APT Output

China's main ammonium paratungstate (APT) producers have agreed to reduce or halt production in June to stabilise the market.

The 17 APT producers, including Chongyi Zhangyuan, Ganzhou Haisheng, China Molybdenum, Jiangxi Yaosheng, Ganzhou Huaxing, Ganzhou Haichuang and Xinsheng Tungsten Tungsten, agreed at a meeting in Ganzhou city in south China's Jiangxi province yesterday to halt production for more than 15 days or reduce output by 30pc based on their annual output. Combined capacity of these smelters account for 50-60pc of China's total production.

The attendees also called on all producers in the tungsten industry to control production to prevent prices from falling further.

APT prices has fallen to their lowest level since August 2017 at 138,000-140,000 yuan/t ($19,950-20,240/t) because of ample inventories and limited downstream demand. All APT producers that are selling below Yn140,000/t are losing money because of firm concentrate feedstock prices resulting from tighter availability.

The China tungsten association, Ganzhou tungsten association and seven producers in May held a meeting in Ganzhou city to call on market participants to take measures to stabilise prices because of lower profit margins and higher production costs resulting from environmental restrictions, with seven producers agreeing to cut their tungsten concentrate production by 10pc to stabilise the market. But the move failed to prevent prices from falling further because of weak demand from downstream consumers from the cemented carbide and special alloy industries.

The market is expected to hold stable in the short term on a potential reduction in spot supplies following the latest production cuts.

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