SMM May 6 report:
On the first day after the holiday, China's tungsten market continued its weak consolidation trend. The upstream raw material market awaited tomorrow's long-term contract guidance prices, with minimal market transactions. Downstream powder and cemented carbide intermediate products saw catch-up declines. Wait-and-see sentiment pervaded the market, with transactions across all segments dominated by scattered rigid-demand small orders, lacking support from bulk transactions.
Ore side, today's SMM 65% wolframite concentrates mainstream price was 700,000–701,000 yuan/standard tonne (65%WO3 basis), largely flat compared to pre-holiday levels. However, actual transaction follow-through was weak, with mines facing significant resistance in shipments. Suppliers' willingness to hold prices firm gradually weakened, while traders continued to offer low purchase prices. The actual spot transaction center shifted lower implicitly, as agency quotes took into account the large price spread between long-term contracts and the scarce spot order transactions in the market. Downstream smelters made no active restocking moves, only maintaining daily rigid-demand purchases. Without incremental procurement support, ore prices were more likely to fall than rise, with further gradual decline expected in the short term.
Smelting APT segment, SMM APT was quoted around 1.1 million yuan/mt, down 20,000 yuan from pre-holiday levels. Daily fluctuations continued to widen, and industry chain cost support further loosened. Smelters sold at low prices to recover funds, causing market quoted price spreads to widen and quotes to become rather chaotic, with spot order transactions mainly seeing gradual declines. Ex-China tungsten prices remained at high levels, with European APT prices holding steady in the $2,900–3,200/mt range (equivalent to 1.77–1.954 million yuan/mt). The price spread between domestic and overseas markets continued to widen, and export profits saw some recovery. However, constrained by tungsten product export control policies, export volume increases were limited, making it difficult to offset the loose supply pressure in China's spot market, with minimal support for the domestic market.
The tungsten powder market weakened in tandem. SMM tungsten powder was quoted at 1,940 yuan/kg, down 40 yuan/kg from pre-holiday levels; carbonised tungsten powder was quoted at 1,875 yuan/kg, down 35 yuan/kg from pre-holiday levels. Powder enterprises had scarce orders, and some leading cemented alloy enterprises had raw material inventory at high levels with no restocking plan in the short term, with industry transaction volumes declining notably. Recycled carbonised tungsten powder was quoted at 1,155 yuan/kg, down 30 yuan/kg. The price spread with primary materials continued to widen, and the substitution rate of low and mid-end recycled materials rose, further suppressing primary powder prices.
The scrap tungsten market overall remained in the doldrums, with prices of most categories holding steady or edging lower. SMM scrap tungsten drill bits and scrap tungsten rods were priced at 660 yuan/kg and 680 yuan/kg respectively. Scrap tungsten alloy inserts were quoted at 540 yuan/kg, down 10 yuan/kg. Purchasing enterprises generally adopted a wait-and-see approach or even suspended purchases, while intermediaries were eager to liquidate and recover funds, with strong willingness to sell at reduced prices. The overall market showed a pattern of abundant supply but few purchases. Scrap fully followed the primary tungsten market trend downward, lacking independent fundamental support, and was expected to maintain a weak gradual decline in the short term.
The ferro-tungsten market also saw notable declines. SMM 70% grade ferro-tungsten was quoted at 1.04 million yuan/mt, and 75% grade at 1.07 million yuan/mt, both down 30,000 yuan/mt from the previous period. Downstream steel mills and special steel enterprises showed sluggish procurement, primarily consuming their own inventory and following up with small orders on an as-needed basis. Panic sentiment among traders intensified, with increasing instances of low-price dumping. Actual transaction prices were generally below mainstream quotations, and the market atmosphere remained weak.
Overall, the current tungsten market lacks short-term demand support, and prices are expected to continue a weak downward drift with oscillating declines, making a rapid rebound unlikely. Moreover, tomorrow (May 7), new-round long-term contract quotations from China's mainstream tungsten enterprises are about to be released. The market widely expects long-term contract prices to continue declining to align with spot cargo levels, which will most likely further drag down spot confidence, amplify short-term selling pressure, and sustain the gradual decline pace. From a medium and long-term perspective, underpinned by the supply rigidity from China's continuously tightening annual tungsten ore mining quotas, the logic of raw material supply contraction remains unchanged, and the room for further deep declines is significantly compressed. The core catalyst for a subsequent market reversal still lies in the actual demand recovery in end-use sectors such as downstream cemented carbide, special steel, and PV tungsten wire, as well as concentrated restocking at low price ranges. Patience is needed to wait for the demand inflection point and industry guidance to materialize simultaneously.
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