SMM May 25 reported:
Today, tungsten market sentiment eased, with increased downstream purchasing activity. Transactions in APT, powder, and other segments recovered. A tungsten mine in Hunan auctioned wolframite concentrates with grades of approximately 12-21%, moisture content of around 12%, estimated at 430 mt in physical content, approximately 100 standard tonnes (65%WO3 basis). The auction was successfully concluded, with transaction prices concentrated at 370,000-380,000+ yuan/standard tonne (65%WO3 basis). The decline in spot order transaction prices for wolframite concentrates slowed down significantly, and the ore side largely completed consolidating at lows. Driven by bullish sentiment, the APT market's transaction center shifted upward today, making it essentially difficult to secure low-priced goods or push for lower prices. Additionally, in the afternoon, an enterprise in Guangdong released its long-term contract prices for the second half of May, which were on par with the long-term contract prices announced by an enterprise in Chongyi on May 20. The 55% ore was uniformly executed at 414,000 yuan/standard tonne (65%WO3 basis), and APT was executed at 660,000 yuan/mt. A pricing consensus among major producers was formed, confirming the bottom range.
Ore side, today SMM quoted 65% wolframite concentrates at 400,000-401,000 yuan/standard tonne (65%WO3 basis), down 10,000 yuan/standard tonne (65%WO3 basis) WoW. The decline in the wolframite concentrates market slowed down, with scarce transactions for high-grade ore and most deals involving medium-to-low grade ore. As industry inventory was gradually released, downstream players progressively entered the market to purchase, and mine auctions were successfully concluded, with transaction prices slightly higher than spot order transaction prices, boosting market sentiment. Today, a tungsten enterprise in Guangdong executed its 55% wolframite concentrates long-term contract price for the second half of May at 414,000 yuan/standard tonne (65%WO3 basis), slightly above spot order transaction prices, further consolidating bottom support for the market. The trend of the industry stopping falling and stabilizing became increasingly clear.
Smelting APT segment, today SMM quoted APT at around 630,000 yuan/mt, flat WoW. In May, maintenance and production cuts were intensive across China's APT industry. Industry production cuts to support prices effectively cleared earlier inventory. As raw material prices gradually stabilized, smelters' willingness to hold prices firm strengthened, downstream just-in-time procurement followed up successively, and market trading activity rebounded slightly. Coupled with the support formed by major producers' long-term contract pricing being finalized, the APT price decline halted, and the market gradually entered a consolidation-at-lows phase. Today, market feedback indicated that downstream enthusiasm for entering the market turned higher, the spot order negotiation center shifted upward, APT sources below 650,000 yuan/mt were hard to find, and smelters held back from selling, mostly withholding offers from the market.
The tungsten powder market continued to see catch-up declines. SMM quoted tungsten powder at 1,170 yuan/kg, down 100 yuan/kg WoW; tungsten carbide powder was quoted at 1,100 yuan/kg, down 100 yuan/kg WoW. Recycled tungsten carbide powder was at 925 yuan/kg. Recently, the scrap tungsten market stopped falling and stabilized, and recycled tungsten enterprises showed insufficient willingness to sell at low prices, with prices expected to stop falling and stabilize.
Overall, as inventory was orderly depleted, downstream just-in-time procurement returned, and a pricing consensus among industry leaders was formed, the tungsten market as a whole entered a bottom-building and recovery phase. Going forward, key attention should be paid to the execution of long-term contracts and the pace of end-use demand recovery. According to SMM's survey on downstream cemented carbide inventory, downstream inventory was indeed gradually reaching low levels, and the market had a just-in-time restocking cycle. However, amid difficulties in stabilizing industry prices, enterprises mostly opted for small-lot procurement. If upstream raw material inventory is gradually cleared and the supply-demand imbalance eases, prices are expected to enter a stabilization and consolidation phase, June-July. SMM expects key attention to be on the transition gap in mine output targets in Q3, with declining supply and demand volumes, while expectations of improved consumption during the September-October peak season are also expected to further optimize the industry's supply-demand structure, thereby bringing bullish sentiment on prices.
