The rise in tungsten prices since mid-to-late November 2023 caused by the tight supply of tungsten ore and the price support from mines is still continuing. With the new round of environmental protection inspections entering Jiangxi, the production of tungsten mines and smelters will be subject to certain restrictions. The tight supply of tungsten ore will be difficult to alleviate for the time being, and factors such as the improvement in demand for CNC tools, a downstream branch of tungsten, have provided strong support for the strengthening of tungsten prices. Compared with the increases in January and February this year, the monthly increase in tungsten prices in March has expanded. How will tungsten prices perform in April?

Tungsten price gradually moved up, with a monthly increase of 1.81% in March

The tungsten price, which had been strong due to factors such as the tight supply of tungsten ore, began to rise again in April. According to SMM quotations, on April 2, the price of black tungsten concentrate (≥65%) was 127,000~127,500 yuan/ton, with an average price of 127,250 yuan/ton, up 500 yuan/ton from the previous trading day, an increase of 0.39%. The average price of black tungsten concentrate (≥65%) has begun an overall upward trend. As of April 2, its average price has increased by 8,250 yuan/ton, an increase of 6.93%. Its average price was 126,750 yuan/ton on March 29, and the average price on February 29 was 124,500 yuan/ton. The average price of black tungsten concentrate (≥65%) increased by 2,250 yuan/ton or 1.81% in March. Compared with the average price increase of wolframite concentrate (≥65%) of 0.61% in January and 1.01% in February this year, its monthly increase has expanded.

Forecast:

From a fundamental point of view, this round of rise in tungsten prices is mainly affected by the tight supply of tungsten ore. Sellers raised prices due to tight ore supply, leaving barely any low-priced resources in the market. A new round of environmental protection inspection task force has entered Jiangxi, and the production of tungsten mines and smelters has been subject to restrictions. The reduction in output due to lower operating rates will occur in April. The tightening supply is difficult to ease for the time being, which will support the high price of tungsten.

From the downstream of the industry chain, in terms of APT (ammonium paratungstate), losses make smelters less enthusiastic about production, and the market maintains low inventory. In the tungsten powder aspect, the downstream cemented carbide replenishment plan has not yet been fully implemented, and the overall trading enthusiasm is limited. Buying is based on demand.

From the perspective of downstream terminal demand, the overall consumer demand for cemented carbide is relatively stable and has not yet improved significantly. The demand for CNC tools, a branch of its downstream demand, has improved.

In summary, taking into account the impact of factors such as environmental protection supervision, the tight supply of tungsten ore has not eased for the time being, coupled with the improvement in demand from downstream branches, it is expected to support tungsten prices to maintain a slight upward trend.