As in any mining story, grade is very important. But tungsten differs from other industrial metals and minerals and can be a tough metal to process.

In fact, it is so specialized that experience with any other metal or material is not transferable.  Therefore, having geologists and a metallurgist who have significant tungsten specific experience is key.

Furthermore, there are primarily two minerals that contain tungsten—wolframite and scheelite—and each requires different milling techniques.
 

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Tungsten ranked second behind rare earths in the British Geological Survey's 2012 supply risk index based on a number of factors like location and tungsten concentration of production and reserves.

But the report highlighted that tungsten (as well as rare earths) has lower recycling and low substitutability. The supply risk for tungsten stems from China's role in the industry.

China accounts for approximately 83% of global tungsten concentrate production and about 62% of global tungsten reserves. China became a significant player in tungsten production in the mid-1980s.

By the late 1990s, it had flooded the global market with tungsten causing concentrate prices to plunge below most western producer's variable cost. As a result, the vast majority of western mines were closed.
 

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The benchmark for tungsten concentrate is ammonium paratungstate (APT), which is the key intermediate product and most commonly traded tungsten material. The APT benchmark is based on FOB Rotterdam. Tungsten demand is correlated with growth in gross domestic product (GDP). While Europeans' consumption of tungsten is down,

Europe only accounts for 12% of global consumption. China and the U.S. account for 55% and 13%, respectively, and their two economies are doing much better. According to Bloomberg, consensus estimates for growth in GDP for China and the U.S. averages 8.03% and 2.50%, respectively, for 2013, 2014 and 2015.

The consensus estimate for Europe's growth in GDP during the same period is only 1%. Therefore, there is certainly an argument that APT prices are artificially low and should be higher than the current average of $350/metric ton unit ($350/Mtu), which is up 8.5% relative to the end of 2012.
 

Tungsten Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
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Location, processing and capital can make the tungsten market a tough place to be, but dwindling supply and insubstantial production indicate a coming price swing.

In this interview with The Metals Report, Ken Chernin, equity research analyst with Jennings Capital, talks about why investors have ignored tungsten in the past and which companies could be a "tungsten global force."

The Metals Report: Tungsten is used in many applications—to make tools, drill bits, glass bottles, aluminum cans, steel and wire.

Because it has a high melting point and is very dense. It's a very useful metal, but the British Geological Survey called it an endangered substance in a 2012 report.
 

Tungsten Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten Picture Center: http://picture.chinatungsten.com
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