SMM Analysis: Tungsten Prices Kept Falling amid Poor Pre-Holiday Stocking, Post-Holiday Outlook Remains Bleak

SHANGHAI, Sep 29 (SMM) - Although the National Day holiday is approaching, tungsten prices kept falling due to shrinking end demand and a lack of cost support.  

Supply  

At present, the production of mines is still proceeding smoothly. As stricter environmental protection checks in October will hamper production, small and medium-sized private mining enterprises are now running at full capacity. 
On the smelting side, due to the recent weak downstream demand, APT prices have continued to fall. Most smelters maintained their operating rates at 70-80% for delivery under long-term contracts and rarely sold cargoes into the spot market. Smelters restocked only as needed. 

Demand  

The output data of the end sectors showed month-on-month decline in August, and the year-on-year growth slowed. Falling end demand hurt the sales of alloy products, thus alloy plants focused on reducing their raw material and finished product inventories.  

With the bearish market sentiment rippling across the supply chain, the stocking willingness of tungsten powder producers was not strong, either. Tungsten powder enterprises maintained the normal purchases of raw materials under long-term orders while keeping just one month of finished product inventory for sale so as to reduce the risk from continued decline in raw material prices. 

Market players are pessimistic over the post-holiday market outlook. Trading activities will remain driven by rigid demand in the short term.