China Tungsten Summit 2020: Tungsten concentrate prices to regain upward momentum in H2

SHANGHAI, Jul 15 (SMM) – Prices of tungsten concentrate in China are expected to recover in the second half of the year, driven by a rise in demand from the downstream hard alloy sector, after prices slipped to a bottom level in June due to weak exports and consumption amid the coronavirus pandemic, said Hu Yan, senior tungsten analyst at SMM. 

Speaking at the 2020 China Tungsten Industry Market and Application Summit, organised by SMM in Zhuzhou, Hunan province on July 15, Hu forecasted mainstream tungsten concentrate prices in China to move between 80,000-90,000 yuan/mt in H2, with prices of ammonium paratungstate (APT), an intermediate product processed from tungsten concentrate, at 120,000-140,000 yuan/mt. 

As of end-June, prices of tungsten concentrate were 8% lower from the start of the year, with prices of APT falling 10%, SMM assessed. 

Tungsten concentrate output in China, the world's largest tungsten ore resources owner and producer, has declined markedly this year, in Q1 in particular, as the pandemic disrupted production and weighed on demand. Hu expected China’s tungsten concentrate output this year to dip about 15% from 2019.

Production will gradually recover in the upcoming two years, but domestic policy control, mining costs, safety and environmental protection issues will keep a lid on output, with growth rate estimated at around 10% in 2021-2022, said Hu. 

SMM data showed that China produced about 121,000 mt of tungsten concentrate in 2012, and the production had since increased year on year, except in 2016 and 2018 when the output edged down 3% and 5%, respectively. 

Most of the global tungsten ore resources are located in China, Canada and Russia, with China currently holding 1.9 million mt of the reserves, 59.4% of the worldwide total, industry data showed. 

Tungsten resources in China are mostly found in Hunan, Jiangxi, Henan, Fujian and Yunnan provinces, which account for more than 90% of the domestic reserves.