Expectations of a Federal Reserve Interest Rate Cut Influence China Tungsten Price

Analysis of latest tungsten market from Chinatungsten Online

China tungsten prices show a stable upward movement in the week ended on Friday, December 15, 2023, mainly driven by the reluctance of sellers in the tungsten primary market to sell at lower prices. 

However, the consumption sentiment from hard alloy and its downstream enterprises lags behind, and the market still faces pressure from insufficient demand and the reluctance to accept higher prices. The tungsten market overall maintains a focus on essential orders, watching the industry chain dynamics and the price quotes from major enterprises in the second half of the month.

The price of tungsten concentrate has risen to a high level of around $17,571.4/ton, driven by the supportive sentiment of sellers in the face of environmental regulations and increased maintenance and production reduction towards the end of the year. However, merchants are maintaining a supportive stance, and spot transaction volumes are limited. The actual demand feedback from downstream industries is still insufficient, restraining further upward potential.

APT prices are stabilizing around $293.8/mtu. Smelters are standing firm in their quotations due to pressure from the inverted yield curve. However, it is challenging to match local price increases with actual orders, and the market's production and sales remain sluggish.

The price of tungsten powder is holding steady at around 273 yuan/kg. There is a divergence in actual transaction negotiations, with fewer orders reported from hard alloy and its downstream enterprises. The market's reluctance to accept higher prices has led to delayed demand, limited stocking plans in December, and a restraining effect on the overall market trend.

The price of 70% ferro tungsten remains at the level of $25,000.0/ton. Low-level raw materials are scarce, and high-level sales are not ideal. The market's main sentiment is stability and cautious observation, and the trade status remains relatively stable.

The price of scrap tungsten is temporarily stable. The sentiment of suppliers is supported by the expectation of a price increase in tungsten raw materials and the preference of purchasers for recycled materials. However, due to the overall subdued market environment, there are limited essential orders, and the market remains temporarily stable.

On the macro level, the Federal Reserve's last interest rate meeting of the year maintains the target range for the federal funds rate at 5.25-5.5%, hinting at the possibility of rate cuts next year. The US dollar index has significantly declined, leading to a relative rebound in the Chinese yuan. The expected interest rate cut by the Federal Reserve may indirectly impact the export profits of tungsten products, but positive external factors could alleviate this pressure. Attention is focused on whether the capital withdrawal caused by previous interest rate hikes will return to the market as expected.

Prices of tungsten products on December 18, 2023

Picture of tungsten carbide rods 

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