Multiple Bearish Factors Pressure Tungsten Market, Short-Term Consolidation on a Weak Note [SMM Tungsten Daily Review]

SMM July 13 News:

Today, China's tungsten market continued to fall mainly. On July 10, a Guangdong-based enterprise announced its long-term contract prices for the first half of July, with 55% wolframite concentrates set at 411,000 yuan per standard tonne (65%WO3 basis). This price was 37,000 yuan per standard tonne lower than the long-term contract price of a Jiangxi-based enterprise on July 6. Bearish sentiment in the market was strong, and ore traders and secondary smelters generally reduced stockpiling, focusing on purchasing and smelting as needed. Overall transactions in China's tungsten market were sluggish today, with spot order transaction prices in the ore and APT markets all carried out below long-term contract prices, and the price spread between spot orders and long-term contracts showing an expanding trend.

Ore side, today, SMM's quotation for 65% wolframite concentrates was 417,500 yuan per standard tonne, down 20,000 yuan per standard tonne from the previous trading day. The price spread between high-grade and low-grade tungsten ore transaction prices expanded in the market. Supply of tungsten concentrates above 55% grade remained tight, with suppliers' quotations firm and the transaction pace faster than that for low-grade material. Currently, inventory of low-grade tungsten concentrates in the industry was relatively high, mines and suppliers faced difficulty selling, and mines mostly had failed bids. Traders showed low enthusiasm for entering the market to purchase. Transaction prices for tungsten concentrates around 30% grade were mostly carried out at 380,000 yuan per standard tonne. Recently, heavy rain occurred in many parts of China, but major mining areas in Jiangxi and Hunan were not affected yet. Recently, various provinces stepped up mine safety inspections, and some open-pit mines were ordered to stop for technological transformation. In the future, attention should still be paid to mine operations and indicator utilization rates.

In the smelting and APT sector, today, SMM's APT quotation was around 610,000 yuan per mt, down 30,000 yuan per mt from the previous trading day. Smelters had high inventory, and the APT market showed a price collapse in selling. Spot order transactions in the market were mostly carried out below 600,000 yuan per mt. Downstream powder enterprises had poor new orders, and enterprises mostly suspended purchases. Some long-term contract suppliers reported that downstream pick-up of long-term contract goods was limited, and execution of long-term contracts saw cases of downstream defaults. Industry profitability declined significantly, and some smelters might choose to cut production and clear inventory.

Powder market, today, the tungsten powder market mainly followed the decline of the raw material market, and the market was unlikely to stop falling in the short term. Downstream hard alloys had weak demand in the off-season, enterprises had poor new orders, and mostly followed real-time cost quotations. Today, SMM's tungsten powder quotation was 1,010 yuan/kg, carbonized tungsten powder quotation was 940 yuan/kg, both down 30 yuan/kg from the previous trading day; recycled carbonized tungsten powder was quoted at 820 yuan/kg, down 20 yuan/kg. Industry enquiries were sluggish, and the market awaited a recovery in downstream hard alloy demand.

Scrap tungsten market, today, the scrap tungsten market mainly consolidated on a weak note. Recyclers' inventory costs were at high levels, and there was unwillingness to sell at low prices. Market transactions were at a stalemate, but dragged by the primary tungsten market, transaction prices mostly followed the decline. Downstream enterprises for recycled carbonized tungsten powder and zinc melting materials had poor orders, and enterprises showed low enthusiasm for entering the market to purchase, mostly restocking based on rigid demand. Market trends are unclear, with limited capital inflow for bulk buying. In the short term, the scrap tungsten market will mainly consolidate on a weak note, following primary tungsten products.

Overall, China's tungsten market in July faces multiple bearish factors: upstream tungsten concentrates and smelting products have earlier inventory awaiting clearance, downstream cemented carbide demand is declining in the off-season, and increasingly strict export control policies make it difficult to increase export orders. The short-term spot market will mainly trend downward and hit bottom, while the market waits for a new round of downstream demand recovery and restocking to boost transactions. In the medium and long term, China's tungsten mines are subject to strict annual mining output quotas, with new mine approvals tightening and aging mines seeing resource depletion. Combined with regular mine safety inspections, the growth space for primary tungsten mines is completely locked in. On the demand side, old and new momentum continue to iterate. Traditional machining, mold and cutting tool demand is steadily recovering, while tungsten usage in emerging fields steadily expands. The global tungsten supply-demand gap will widen slightly year by year, providing a long-term upward driver for tungsten prices.