SHANGHAI, Dec. 16 (SMM) – Transactions for tungsten concentrate were up sharply this past week, Shanghai Metals Market survey finds.
From this Wednesday, smelters in Ganzhou, Jiangxi Province purchased a large amount of tungsten concentrates. Data show trading volumes by smelters in the region exceeded 1,500 tonneson Wednesday and Thursday, and average price was over 70,000 yuan per tonne, with price more than 1 yuan per kg in some regions for processed ore. The pickup in trading was due mainly to stock replenishment earlier than schedule and purchasing demand by listed tungsten producers in Jiangxi, which offer procurement price for term shipments of black tungsten ore at 74,000 yuan per tonne.
The earlier stockpiling was mainly because of optimistic outlook for market after the 2017 Chinese New Year holiday. Current purchases are exposed to small risks given the relatively stable price before the holiday. Meanwhile, most ore suppliers show low selling interest in the pre-holiday market due to market optimism, and so some large smelters enter the market for purchases to get prepared for the future. It is learnt that one large smelter in Ganzhou replenished goods by over 800 tonnes this past week.
At the year end, demand is tepid, ranging from hard alloy to tungsten powder, and so producers largely make purchases based on orders. Soft demand gives no support to higher prices, and such conditions are extremely obvious in the APT market due to surging raw materials against low downstream procurement prices. Based on tungsten concentrate prices, APT cash prices should be 111,000 yuan per tonne at the least, but at present, sparse deals are reported at more than 110,000 yuan per tonne.
SMM expects smaller chance for prices in domestic tungsten market to weaken before the 2017 Chinese New Year holiday in late January, as it only 20 days left for production and trading days before the holiday. Trading will be waning gradually as suppliers will hold back goods, while buyers will meet difficulties in purchases.