Tungsten Concentrate Price Through “A Song of Ice and Fire”

Tungsten concentrate price and the tungsten mine output trend are basically keep the same for more than 100 years in the past, and gradually rise in turbulence, it is being closely related to the speed of global economic development. Its price has skyrocketed due to international wars and crises, while in the 1980s, low-cost Chinese tungsten concentrates gradually occupied the global market, the oversupply led to a long-term downturn in its price.

Since then, China began to control the total amount of mining in tungsten mines in 2002. The mining volume control was also implemented in 2004, which caused tungsten concentrate price to rise.

With the rapid growth of China's economy and increasing demand, tungsten concentrate price has experienced a short-term decline after the global economic crisis in 2008, but the overall price has remained high in 2014, then Chinese economy began to slow down and the tungsten concentrate market was over-supplied. In November 2015, the price of tungsten concentrates was gloomy, leading tungsten mines companies suffered serious losses.

Faced with the severe situation of loss, in March 2016, tungsten enterprises jointly reduced production for 10,000 tons, accounting for 8% of total production in 2015. In April 2016, China collected 10,000 tons of tungsten concentrate. The structure of tungsten supply and demand has effectively improved by these measures.

By 2017, many companies started to accelerate tungsten mining, infrastructure investment has been increased moderately. At the same time, environmental supervision and crackdown on illegal mining continued to suppress, and the price of tungsten concentrates rose further: it returned to 100,000 RMB/ton.

However, since the beginning of 2018, tungsten concentrate has continued to decline, with a cumulative decline of 16.5% and APT cumulative decline of 17.9%. The sharp decline in prices has led to the continuous expansion of the losses of mines and smelting enterprises.

In the long run, based on the dominant position and influence of China's tungsten resources in the world, the gradual rational recovery of tungsten market prices is inevitable. This can be analyzed from its supply and demand as below:

China government will continue to control the “master switch” on the issuance of tungsten mining licenses, production capacity of tungsten concentrates will remain stable. China has clarified that by 2020, the total amount of tungsten mining will be controlled at 120,000 tons/year, and will continue to control the total amount. Affected by factors such as non-renewable of tungsten resource, mining cost, market price, safety, and environmental protection, the output of tungsten concentrate is generally stable, and there will be no large increment. The market supply will continue to be stable in the future. 

Tungsten demand will continue to grow. The US economy will continue to recover, and the recovery of manufacturing will drive demand for tungsten, and the demand for tungsten will continue to recover. However, due to some uncertainties in international trade situation, the future price of tungsten may also be tortuous.

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