It is difficult to increase the output of tungsten concentrate. In the short term, the tungsten market will consolidate at a high level supported by the cost side [SMM Tungsten Review]

On August 8:

This week, the tungsten market maintained a high consolidation. The circulation of tungsten concentrate was tight in the market. Most mainstream mines in Jiangxi Province shipped according to long-term contracts. Due to weather impacts, mining activities in mines in South China and Southwest China (south-west China) experienced a seasonal decline, and suppliers held firm on their quotations. Ammonium paratungstate (APT) enterprises negotiated prices on a case-by-case basis, with few spot order transactions, leading to a significant contraction in market volume. Domestic mainstream tungsten enterprises successively released long-term contract information during the week, with long-term contract prices showing a substantial increase compared to July, boosting market confidence. Downstream cemented carbide enterprises followed the price increase passively, but the increase was limited.
Tungsten ore: As of August 4, SMM's black tungsten concentrate (65%) closed at 195,000-196,000 yuan/mt, up 2,000 yuan/mt from Monday this week. The market circulation remained tight, and there was little expectation of a correction in the short term.
Ammonium paratungstate: Today, SMM's ammonium paratungstate (≥88.5%) was quoted at 286,000-290,000 yuan/mt, up 4,000 yuan/mt from Monday this week. APT enterprises faced high costs and were constrained by ore supply tightness, leading to a slight decline in operating rates. The negotiation center in the market shifted upwards, with some enterprises' quotations reaching 290,000 yuan/mt. The industry's average cash cost reached 286,000 yuan/mt, posing high risks and insufficient willingness among enterprises to sell at low prices. European APT prices rose again during the week, triggering a bullish sentiment among some suppliers. Downstream powder enterprises mainly shipped according to long-term contracts, with significant cost fluctuations. Enterprises were cautious in taking orders. Today, SMM's tungsten carbide powder closed at 427.5 yuan/kg, up 10 yuan/kg from Monday this week, and tungsten powder closed at 437.5 yuan/kg, up 10 yuan/kg from Monday this week. Downstream cemented carbide enterprises were wary of high prices and made fewer purchases. Some cemented carbide enterprises issued price adjustment letters to cope with the increase in upstream powder and other raw materials.

Ferrotungsten: Ferrotungsten prices rebounded sharply this week, driven by cost support. Downstream special steel enterprises made just-in-time procurement. Some enterprises experienced production cuts due to shortages of scrap tungsten materials. The industry's operating rates declined compared to the previous period. Traders were wary of high prices and mainly made just-in-time procurement. Today, the mainstream quotation for 70% ferrotungsten was concentrated at 293,000-298,000 yuan/mt, up 7,500 yuan/mt from Monday this week, with low-priced goods hard to find.

In the short term, it is difficult for the short-term supply of tungsten concentrate to increase significantly. The cost support logic in the tungsten market remains. Downstream cemented carbide enterprises follow the price increase passively. The market continues to test the follow-up of end-use demand, with transaction volumes contracting. However, given the limited bargaining space upstream and the limited inventory of some raw materials, it is difficult for short-term prices to be suppressed by weak demand, and they may remain high and consolidate.