China Tungsten Prices Maintain Strong Trend with Positive Market Sentiment

Analysis of latest tungsten market from Chinatungsten Online

China tungsten prices have been maintaining a strong upward trend, with market sentiment remaining optimistic. The supply of tungsten remains tight and prices are high, especially as environmental inspections by central authorities in major production areas are adding pressure to the supply chain. 

However, the demand foundation is relatively unstable, and downstream sectors are slow to absorb high-priced raw materials. Recently, the market has been cautious about price increases, and prices for hard alloy products are rising step-by-step. Across the tungsten industry chain, there is a cautious approach to maintaining low inventory levels. In the short term, there is a wait-and-see attitude regarding new long-term contract prices from major tungsten enterprises and the situation with environmental inspections in main production areas.

The price of 65% black tungsten concentrate is reported at $22,000.0/ton, nearing the historical high of September 2011. Ammonium paratungstate (APT) prices are reported at $368.0/mtu, with smelters commonly complaining about inversions. Tungsten powder prices are reported at $48,85.7/ton, and tungsten carbide powder at $47,571.4/ton, with traders cautious about signing deals due to cost risks. The price of ferrotungsten (70%) is reported at $32,142.9/ton, closely following the cost rhythm of tungsten raw materials. Tungsten bars at $32.9/kg, with market opinions divided between holding back sales and profit-taking, resulting in somewhat chaotic pricing.

Sino-US Trade Protection Battle Over "Critical Minerals"

On the 14th, the U.S. government announced that tariffs on $18 billion worth of Chinese imports, including steel and aluminum, semiconductors, batteries, critical minerals, solar cells, and cranes, would increase from the current 25% to 100%. This measure is seen as an abuse of trade protectionism by the U.S. At a Chinese Foreign Ministry press conference on the same day, spokesperson Wang Wenbin stated that China will take all necessary measures to safeguard its legitimate rights and interests. It remains unclear whether the so-called critical minerals will include sanctions and countermeasures involving tungsten, molybdenum, and rare earth products. Therefore, it is important to monitor the developments and impacts of this event, as the U.S. is a major market for China's critical minerals.

The Stabilizing Role of the Renminbi in Tungsten Product Pricing

The renminbi (RMB) is seen as the anchor currency for global tungsten prices. This viewpoint is supported by the following points:

1.China possesses approximately 70% of the world's proven exploitable tungsten resources, giving it an absolute resource advantage.

2.Leading Chinese enterprises have advanced capabilities in tungsten resource extraction and refining, being globally dominant. Additionally, numerous tungsten recycling enterprises in regions like Hebei and Shandong, represented by companies like GEM, have increasingly sophisticated recycling processing capabilities.

3.As the "world's factory," China is advancing from manufacturing to innovation. In 2023, exports of electric passenger vehicles, lithium-ion batteries, and solar cells exceeded 1 trillion CNY for the first time, growing by 30%, with ship and home appliance exports increasing by 35.4% and 9.9%, respectively. Mechanical and electrical products are a significant and dynamic part of export products. This reflects China’s strong progress towards innovation. Consequently, China’s consumption of tungsten products in industrial production accounts for about 70% of global tungsten product consumption, making RMB-denominated Chinese tungsten product prices representative of global prices.

4.Despite a strong dollar environment in recent years, the RMB has remained relatively stable compared to significant depreciations in Asian currencies like the yen, rupee, and others, maintaining a beneficial range for exports.

5.Recent years have seen substantial advancements and technological upgrades in tungsten refining by state-owned large tungsten product enterprises. These improvements have greatly enhanced the technical and carbon emission barriers for tungsten refining, gradually narrowing the gap with Western companies, thus enabling China to independently support the development of its "new quality productivity" with high-quality tungsten products.

In summary, supported by China's tungsten refining technology and market, the RMB has a stabilizing role in global tungsten product prices. The external influence of Chinese tungsten product prices will soon become apparent, further driving global tungsten product prices to resonate with China.

Prices of tungsten products on May 16, 2024

Picture of tungsten needles

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