SMM, July 23:
The tungsten market center rebounded slightly this week. Early in the week, transactions of upstream raw materials turned active, and the market transaction center edged up slightly. Mine-side suppliers’ sentiment of holding back from selling heated up, with firm offers. However, the supply of medium- and low-grade ore was ample in the market, and the price spread between high- and low-grade ore transaction prices showed a widening trend. Early in the week, a tungsten enterprise in Jiangxi released its long-term contract prices, which were overall close to spot transaction prices on that day, narrowing the price spread between long-term contracts and spot orders. As the weekend approached, market sentiment diverged. Downstream powder and cemented carbide sectors remained in the off-season, while APT spot transaction prices mostly hovered near smelting costs, and enterprises’ shipments and operating rates both showed weakening trends.
On the mine side, as of July 23, SMM 65% wolframite concentrates closed at 416,500 yuan per standard tonne, up 14,000 yuan per standard tonne for the week. The market for tungsten concentrates above 55% grade traded in the range of 411,000-420,000 yuan. Meanwhile, transactions of tungsten concentrates below 30% grade were weak. On July 22, a mine in Guangdong auctioned six batches of wolframite concentrates around 18-23% grade, and two batches were transacted. Among them, 43 standard tonnes of 23% wolframite concentrates fetched a transaction price of 366,500 yuan per standard tonne, and 29 standard tonnes of 18% grade were transacted at 338,100 yuan per standard tonne. These transaction prices were slightly below mainstream transaction prices, but due to the low grade of the ore, downstream purchasers faced higher processing costs, while the mine, holding high inventories, was motivated to monetize and had a need to clear its inventory. On the production side, recently, some mines in Henan, due to safety inspections and other reasons, concentrated on production cuts and maintenance, affecting the output of wolframite concentrates from some mines. In addition, it is learned that a national safety inspection team will soon be stationed in Jiangxi, and close attention should be paid to the operating status of local mines and related industries thereafter.
In the smelting APT segment, as of July 23, SMM APT closed at 610,000 yuan per mt, up 10,000 yuan per mt for the week. It followed the slight recovery in the ore market early in the week, but the upward momentum lacked sustainability. As market sentiment diverged towards the weekend, the weakness in downstream demand was highlighted again. APT spot transactions were mostly near the smelting cost line, with profit margins continuously squeezing. Currently, downstream powder enterprises are seeing mediocre order performance and are cautious in their purchasing pace. Smelters still face destocking pressure. Against the backdrop of sluggish product shipments, some smelters have increased their willingness to reduce production loads, and industry operating rates are showing a downward trend.
In the powder market, the tungsten powder market saw mediocre transactions overall this week. With costs edging up slightly, powder enterprises mostly followed with price increases. However, transactions at high prices were limited, and the market still exhibited a lack of upward momentum in transactions. As of July 23, SMM tungsten powder was quoted at 1,000 yuan/kg, and tungsten carbide powder at 930 yuan/kg, both up 20 yuan/kg for the week. The traditional off-season for downstream cemented carbide continues. New orders in machining, cutting tools, and mold sectors were weak. Powder enterprises lacked the initiative for active stockpiling, and basically quoted based on real-time raw material costs. Overall, inquiries in the market were sluggish. Recycled tungsten carbide powder prices moved in tandem with primary powder, with recycled smelters mainly making just-in-time procurement, and the market lacked a boost from incremental orders.
Scrap tungsten market: During the week, the scrap tungsten market swung wildly. Early in the week, bullish sentiment among suppliers was strong, market transaction volumes surged, and traders actively restocked, but downstream smelters entered the market sluggishly, with circulation mainly confined to the pure trade segment. Toward the end of the week, the upstream tungsten raw material market stalled, compounded by elevated scrap tungsten transaction prices and significant gains, market sentiment pulled back, and some suppliers actively sold. As of today, SMM scrap tungsten bar closed at 690 yuan/kg, up 40 yuan/kg for the week. Market suppliers remained bullish on the tungsten market for August-September, with limited willingness to sell at low prices.
Overall, this round of price rebound was mainly driven by ore-side holding back from selling and phased restocking, while the downstream end-user off-season pattern has not fundamentally changed. APT and powder segments saw shipments under pressure, smelting operations are expected to decline, and the sustainability of the tungsten price rebound still requires stimulation from end-user consumption. Going forward, focus on the execution of long-term smelting contracts, the pace of ore-side shipments, and changes in cemented carbide orders. In the medium to long term, during August to October, consumption will improve mildly, coupled with the gradual clearing of upstream raw material inventories, the supply-demand imbalance will ease, and the tungsten market is expected to see an upward recovery.
