Shrinking Volume: Wolframite Concentrates Fall Nearly 5% in Less Than a Month, What's Next After Breaking Below the 400,000 Yuan Mark? [SMM Commentary]

SMM, September 23:

Affected by shrinking spot transactions and weak end-use demand, China’s tungsten market has entered a continuous downward trajectory over the past month. Leading tungsten enterprises further lowered their long-term contract prices for the second half of September, which to some extent reflects the current weak supply-demand conditions across the tungsten industry chain. The average price of wolframite concentrates (≥65%) fell nearly 5% in less than a month, weakening confidence across the industry chain. How will tungsten prices perform going forward?

Leading tungsten enterprises lower long-term contract prices for H2 September

A leading tungsten enterprise in Chongyi recently released the following long-term purchase prices for the second half of September: 1. 55% wolframite concentrates: 400,000 yuan/standard tonne (65% WO3 basis), down 13,000 yuan/standard tonne from the previous round; 2. 55% scheelite concentrates: 399,000 yuan/standard tonne, down 13,000 yuan/standard tonne from the previous round; 3. APT (national standard, zero grade): 580,000 yuan/mt, down 20,000 yuan/mt from the previous round.

Wolframite concentrates fall 4.78% in less than a month

According to SMM price data, the average price of wolframite concentrates (≥65%) on September 23 was 398,500 yuan/standard tonne, down 0.5% from the previous trading day. Looking back at the price trend of wolframite concentrates, the average price of wolframite concentrates (≥65%) has been on a sustained downward trend since pulling back on August 27. The average price of 398,500 yuan/standard tonne on September 23 was down 20,000 yuan/standard tonne, or 4.78%, from 418,500 yuan/standard tonne on August 26.

From the spot market performance, China’s tungsten market is currently in the doldrums: downstream buyers and traders are making few purchases, with spot orders scarce; APT transactions are weak, with long-term contract prices already close to spot order prices; although smelters have reduced operating loads, industry inventories remain high and downstream powder enterprises have poor order books, creating a pronounced supply-demand imbalance, with traders mainly cutting prices to offload cargo.

Outlook

Short-term: China’s APT smelting operating rate has pulled back somewhat, while total mining volume controls provide rigid supply constraints, giving some bottom support to tungsten prices from the upstream raw material side. However, downstream powder and cemented carbide enterprises are still digesting previously purchased high-priced raw material inventories, and there is no clear signal yet of end-user orders recovering, so upward price momentum is insufficient. Weighing the tug-of-war between longs and shorts, tungsten prices are expected to remain in the doldrums and consolidate in the short term, with the price center still at risk of edging lower. Going forward, the key focus will be on actual end-user order fulfillment during the traditional peak season and whether downstream restocking willingness improves.

Medium and long-term perspective: China's tungsten resource endowment is outstanding, and combined with policy constraints such as total mining volume controls and export licensing, it still forms an important bottom support for tungsten prices. Although overseas mine development has accelerated somewhat, the construction cycle for complete supporting smelting capacity is relatively long, and the supply contradiction in the global tungsten industry chain will continue to persist. The current tungsten price system may be in a restructuring phase, and the evolution of structural price spreads between markets in China and overseas, as well as the pace of overseas supply growth release, all require continuous and close monitoring of SMM