Tungsten Market Demand Shows No Significant Improvement; Multiple Tungsten Enterprises Lower Long-Term Contract Prices Again [SMM Commentary]

SMM March 6 News:

With the completion of maintenance at some mining enterprises and the gradual resumption of production, market concerns over tight tungsten raw material supply have eased. Although upstream miners remain reluctant to sell at low prices, downstream enterprises, considering the YoY decline in new orders and cost control, are unwilling to purchase at high prices. Market trading activity remains low, and tungsten prices have fluctuated downward over the past month. Jiangxi Tungsten and Zhangyuan Tungsten have also continued to lower their long-term contract prices.

Jiangxi Tungsten and Zhangyuan Tungsten Continue to Lower Long-Term Contract Prices

Jiangxi Tungsten Holding Group Co., Ltd.'s guidance price for national standard Grade I black tungsten concentrate for the first half of March 2025 is 141,000 yuan/mtu, down from the previous guidance price of 143,500 yuan/mtu.

Chongyi Zhangyuan Tungsten Co., Ltd.'s long-term contract prices for the first half of March are as follows: 1. 55% black tungsten concentrate: 139,000 yuan/mtu, down 2,500 yuan/mtu from the previous price; 2. 55% white tungsten concentrate: 138,000 yuan/mtu, down 2,500 yuan/mtu from the previous price; 3. Ammonium paratungstate (APT, national standard zero grade): 209,000 yuan/mt, down 2,000 yuan/mt from the previous price. Note: The above prices include 13% VAT.

Black Tungsten Concentrate and Ammonium Paratungstate Prices Have Declined Over the Past Month

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Spot Market: Currently, miners' willingness to sell remains low, while producers are cautious in procurement, showing a clear tendency to suppress prices. Smelters face dual challenges of high raw material costs and poor bulk sales. End-use market demand has not yet recovered, and new orders for powder and hard alloy enterprises have decreased YoY.

Prices: According to SMM quotations, as of March 6, the price of black tungsten concentrate (≥65%) was 140,500–141,500 yuan/mtu, with an average price of 141,000 yuan/mtu, down 500 yuan/mtu from the previous trading day, a decrease of 0.35%. The average price of 141,000 yuan/mtu represents a decline of 4,000 yuan/mtu, or 2.76%, compared to the previous high average price of 145,000 yuan/mtu on February 13. Regarding ammonium paratungstate (APT, domestic), the average price on March 6 was 209,000 yuan/mt, down 4,000 yuan/mt, or 1.88%, from the recent high average price of 213,000 yuan/mt on February 13.

APT Production Increased by Approximately 21% MoM in February

APT Production: According to SMM data, China's ammonium paratungstate (APT) production in February increased by approximately 21% MoM. After the Chinese New Year, smelters resumed production to actively meet the demand for long-term contracts, leading to a significant recovery in February's APT production. Despite tight tungsten ore resource supply, social inventory of ore slightly decreased during February, with spot supply slowly entering the market, keeping raw material supply relatively stable overall. Looking ahead to March, as ore supply gradually recovers, APT raw material supply is expected to increase. However, due to sufficient downstream stockpiling before the holiday and slow post-holiday demand growth, enterprise confidence remains weak. Downstream demand is expected to improve by mid-to-late March. Considering various factors, the growth rate of APT production in March is likely to slow.

Market Outlook

Currently, some tungsten mining enterprises have completed maintenance and are gradually resuming production. As supply is expected to recover gradually while demand has yet to show significant improvement, tungsten prices are likely to continue fluctuating downward. Attention should be paid to the recovery of demand from downstream tungsten enterprises during the traditional "Golden March and Silver April" period and the export of tungsten in compliance with relevant regulations.

On February 4, a spokesperson for the Ministry of Commerce stated: Implementing export controls on tungsten and related items is a common international practice. As a major global producer and exporter of tungsten and related items, China has long been committed to fulfilling international obligations such as non-proliferation. Based on the need to safeguard national security and interests, China has lawfully implemented export controls on specific related items. The recent addition of related items reflects a regulatory approach that balances development and security, contributing to better safeguarding national security and interests, fulfilling non-proliferation obligations, and ensuring the security and stability of global industry and supply chains. Exports in compliance with relevant regulations will be permitted.