Tungsten Raw Material Transaction Center Rebounded Slightly, End-Use Demand Still Needs Attention Going Forward [SMM Tungsten Daily Review]

SMM May 27:

The tungsten market saw eased trading today, with increased market inquiries. Transaction centers for upstream ore and APT spot orders shifted upward, and market transaction prices gradually converged toward mainstream long-term contract prices in the industry. Some APT enterprises chose to halt sales, actively tightening market circulation. The overall market showed a slight rebound, but vigilance is still needed regarding industry inventory clearance going forward.

Ore side, SMM quoted 65% wolframite concentrates at 410,500 yuan/standard tonne (65%WO3 basis) today, up 10,000 yuan/standard tonne (65%WO3 basis) from the previous trading day. Inquiry volume in the tungsten concentrates market increased, with traders actively purchasing, but mines showed limited willingness to sell at low prices. Spot order transaction prices strengthened, with spot order transaction prices for tungsten concentrates above 55% gradually moving up to above 400,000 yuan/standard tonne (65%WO3 basis). Downstream APT industry inventory still needs time to digest, but with rebound expectations on the ore side, some smelters chose to enter the market to stockpile, driving some improvement in trading volume. Continued attention should be paid to mine auction transaction results and changes in earlier industry inventory levels.

Smelting APT segment, SMM quoted APT at around 645,000 yuan/mt today, up 15,000 yuan/mt from the previous trading day. After the APT market underwent production cuts and inventory clearance, market trading gradually eased. With high average industry costs, smelters showed limited willingness to sell at low prices. Some smelters mainly shipped under long-term contracts and suspended spot order shipments. Downstream powder enterprises had not yet increased procurement volumes. Some rigid-demand restocking orders saw transaction centers shift upward to 630,000-660,000 yuan/mt, with overall trading volume improving, but upside room would still be affected by the pace of end-user restocking follow-through.

The tungsten powder market mainly operated in a stalemate. On one hand, during the earlier sharp decline in upstream raw materials, the tungsten powder market saw a relatively small decline, and the market had expectations of a catch-up decline. On the other hand, downstream cemented carbide alloy enterprises showed insufficient willingness to enter the market, with insufficient demand release, and actual industry transaction prices remained weak. SMM quoted tungsten powder at 1,120 yuan/kg today and carbonised tungsten powder at 1,050 yuan/kg, with actual market transactions below listed prices.

Scrap tungsten market: The scrap tungsten market saw a tug-of-war between longs and shorts. The halt in decline in the primary tungsten market boosted the scrap tungsten market. Some traders entered the market to purchase, but mostly pushed for lower prices. Suppliers had relatively high earlier procurement costs, and issues such as industry invoicing had a significant impact. No panic selling was seen in the market. Scrap tungsten drill bits were quoted at 585 yuan/kg, up 30 yuan/kg from the previous day; scrap tungsten alloy inserts were quoted at 480 yuan/kg, up 10 yuan/kg from the previous day. Currently, the overall trading pace in the market was relatively slow, with notable price divergence between buyers and sellers, and transactions were mostly concentrated in sporadic small orders. Downstream recycled smelters restocked on an as-needed basis without large-scale stockpiling, maintaining a cautious purchasing attitude.

Overall, market trading activity has rebounded, with solid bottom support from the ore side and APT. Producers' willingness to hold prices firm has strengthened, and downside room in the market is largely closed off. However, end-use demand remained weak, with only rigid demand small orders transacted in the market, lacking the positive stimulus of bulk restocking, resulting in insufficient upward momentum for significant price rises. In the short term, the tungsten market will maintain a pattern of moving sideways with price stabilization and recovery. The key focus going forward will be on the pace of downstream order release and the materialization of concentrated restocking, which will be critical in driving the market to break through the current sideways pattern.