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Many Large Tungsten Companies Raise their Quotations for Long-Term Orders in January 2023
Jan 10, 2023 15:59CST
Source:SMM
Many large tungsten enterprises continue to raise the quotes of long-term orders in 2023.

SHANGHAI, Jan 10 (SMM) - Many large tungsten enterprises continue to raise the quotes of long-term orders in 2023. Quotes of January long-term contracts offered by Zhangyuan Tungsten are (unit price, 13% VAT included): wolframite concentrate (WO3≥55%) 115,000 yuan/mt in standard content, up 3,000 yuan/mt from the previous quotation; Scheelite concentrate (WO3≥55%) 113,500 yuan/mt, up 3,000 yuan/mt; APT (National standard-0) 176,500 yuan/mt, up 4,500 yuan/mt. Guidance price of wolframite concentrate in the first half of January quoted by Jiangxi Tungsten Holding Group is 116,500 yuan/mt, up 2,500 yuan/mt from the previous quotation. A large company in Fujian quotes the purchase prices of APT under long-term contracts in the first half of January at 176,000 yuan/mt (in cash).
According to the latest SMM data, on January 10, the prices of wolframite concentrate (≥55%) were 114,500-115,500 yuan/mt, and the daily average price was 115,000 yuan/mt, up 500 yuan/mt from the previous trading day. Prices of scheelite concentrate (≥55%) stood at 113,000-114,000 yuan/mt, with a daily average price of 113,500 yuan/mt, flat from the previous trading day. Chinese APT prices moved between 175,000-177,000 yuan/mt, with a daily average price of 176,000 yuan/mt, up 500 yuan/mt from the previous trading day.

In 2023, the tungsten prices will edge higher, boosting market confidence to a certain extent. On the supply side, the producers have gradually started their maintenance near the end of the year, which, coupled with the high costs, supports the tungsten prices. SMM expects that tungsten prices will remain high and may increase tentatively in the short term.

According to SMM research, Chinese APT output in December 2022 was 11,900 mt, a decline of 5% on a monthly basis.

The reduction in APT output was mainly affected by the following factors. First, the spread of the COVID-19 slightly dragged down the operating rates of APT smelters. Second, downstream enterprises mainly stocked as needed due to the sluggish end demand in the recent quarter. The weak demand and strong supply promoted some smelters to be closed for maintenance in December. Thirdly, as mines and goods holders held their prices firm while holding back from selling, the available tungsten concentrates in the spot market was limited. The low-priced goods were scarce while high-priced cargoes would bring about losses. In this scenario, APT smelters resorted to production cuts, and mainly focused on the delivery of long-term orders. Altogether, the output of APT decreased in December.

In January, the production at smelters has still been upset by the tight supply of raw materials and lower profits. The downstream enterprises are less willing to restock at the year-end. At the same time, the private mines carried out overhaul, which further pushed up the APT prices. APT prices of small orders have reached 177,000 yuan/mt, which affects the smelters’ in-plant inventory of raw materials and orders. SMM thus expects that APT output will continue to move down in January.

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