Market Activity Remains Low, Upstream and Downstream in a "Stalemate" Game, Tungsten Enterprises' Long-Term Contract Quotations Remain Generally Stable [SMM Commentary]

SMM, December 20:

With Jiangxi Tungsten Industry and Zhangyuan Tungsten Industry successively releasing their long-term contract quotes for the second half of December, it can be observed that the long-term contract quotes from multiple tungsten enterprises in this round are relatively "stable." Among them, the long-term contract quotes of Jiangxi Tungsten Industry and a large tungsten enterprise in Fujian remained unchanged from the previous round, while Chongyi Zhangyuan Tungsten Industry slightly lowered its long-term contract quotes. Currently, the situation of tight upstream supply and no significant improvement in downstream demand remains unchanged, causing tungsten prices to "stagnate" amid the ongoing tug-of-war between upstream and downstream.

Long-Term Contract Quotes Released by Jiangxi Tungsten Industry, Zhangyuan Tungsten Industry, and Other Tungsten Enterprises

Jiangxi Tungsten Industry Holding Group Co., Ltd.'s guidance price for national standard first-grade black tungsten concentrate for the second half of December 2024 is 142,500 yuan/standard mt (unchanged from the previous round).

Chongyi Zhangyuan Tungsten Co., Ltd.'s long-term contract quotes for the second half of December are as follows: 1. 55% black tungsten concentrate: 140,000 yuan/standard mt, down 500 yuan/standard mt from the previous round; 2. 55% white tungsten concentrate: 139,000 yuan/standard mt, down 500 yuan/standard mt from the previous round; 3. Ammonium paratungstate (national standard zero grade): 209,500 yuan/mt, down 500 yuan/mt from the previous round (all prices above include 13% VAT).

A large tungsten enterprise in Fujian set its APT long-term contract purchase price for the second half of December at 209,500 yuan/mt (unchanged from the previous round).

Guangdong Xianglu Tungsten Industry's December 2024 long-term contract tax-inclusive (cash) purchase prices are as follows: 55% black tungsten concentrate at 140,000 yuan/standard mt, down 500 yuan/standard mt from the previous round; 55% white tungsten concentrate at 139,000 yuan/standard mt, down 500 yuan/standard mt from the previous round; APT at 209,500 yuan/mt, unchanged from the previous round.

The Price Center of Black Tungsten Concentrate Slightly Declined by 1.22% in December

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According to SMM quotes, the price of black tungsten concentrate (≥65%) on December 20 was 142,000–142,500 yuan/standard mt, with an average price of 142,250 yuan/standard mt, unchanged from the previous trading day. The average price of black tungsten concentrate (≥55%) on December 20 fell by 250 yuan/standard mt, a decrease of 0.18%.

Reviewing the historical trend of the average price of black tungsten concentrate (≥65%), as of December 20, its price center slightly declined. Compared with the average price of 144,000 yuan/standard mt on November 29, it dropped by 1,750 yuan/standard mt, a decrease of 1.22%.

Outlook

According to SMM, the recent tight supply of upstream raw materials has reignited the sentiment to stand firm on quotes in the market. However, downstream enterprises are experiencing low demand due to insufficient new orders, and the "inverted" prices have dampened the enthusiasm for pre-holiday restocking. Amid the stalemate between upstream and downstream, the circulation of tungsten market supplies is moderate, and transaction activity is low. Given the overall stability of long-term contract quotes and the unchanged supply-demand relationship, SMM expects tungsten prices to continue to fluctuate downward in the short term.