Domestic Tungsten Prices in the Doldrums, APT Price Spread Between Domestic and Overseas Markets Rapidly Narrows [SMM Tungsten Daily Review]

SMM September 18

The tungsten market remained in the doldrums today, with some low-priced transactions of non-tax-included tungsten concentrate. The transaction center fell back again, but overall trading volume was low. Downstream smelting and powder enterprises mainly relied on shipments under long-term contract, with few spot orders in the market. Coupled with strong fear of high prices, some transactions showed hidden declines. The tungsten scrap market lacked confidence, and suppliers still engaged in risk-averse selling. Downstream purchasing enterprises mostly drove down purchasing prices, leading to a significant drop in the tungsten scrap market. Recently, influenced by the pullback from highs in the domestic tungsten market, the price spread between domestic and overseas markets narrowed significantly, with some high-end overseas prices basically aligning with domestic spot prices.

Ore end: As of September 18, SMM black tungsten concentrate (65%) closed at 280,000-281,000 yuan/mtu, down 2,000 yuan/mt WoW and down 5,000 yuan/mtu from last Friday. Spot order transactions for tungsten concentrate were cautious, with only some non-tax-included goods traded. Low-grade ore was tendered for sale in Guangdong and other regions, but enterprise participation was poor due to market pessimism, and no transactions were concluded. Overseas ore had sporadic offers but limited transactions. The release of the second batch of quotas for the year remains unclear, with some enterprises reporting that subsequent quotas might be directly allocated to enterprises or applied for as needed. Numerous uncertainties have intensified industry wait-and-see sentiment.

Ammonium paratungstate: Today, SMM ammonium paratungstate (≥88.5%) was quoted at 401,000-416,000 yuan/mt, down 4,000 yuan/mt from the previous trading day and down 6,500 yuan/mt from last Friday. Ammonium paratungstate enterprises still faced high costs, with some traders concluding low-priced transactions. Market transactions shrank significantly, as downstream buyers drove down purchasing prices to test trader sentiment, resulting in hidden declines. A small number of transactions had already fallen below 400,000 yuan/mt. Domestic ammonium paratungstate continued to decline, while the overseas market remained firm. As of today, European APT (unchanged) 550-645 (unchanged) $/mtu, equivalent to 346,400-406,200 yuan/mt, with high-end prices basically aligning with the domestic spot market. The powder market weakened today, with the industry mostly fulfilling previous orders and few spot orders traded. Today, SMM tungsten carbide powder closed at 620 yuan/kg, and tungsten powder closed at 635 yuan/kg, down 5 yuan/kg from the previous trading day. Downstream cemented carbide had restocked heavily during the previous rapid rise in tungsten prices, leading some powder enterprises to still process previous orders, which to some extent reduced spot circulation in the powder market.

Ferrotungsten: Market wait-and-see sentiment was strong, with downstream steel mills and traders showing poor purchase willingness. Market transactions were weak, and supplier quotes loosened, with prices declining. Today, mainstream quotations for 70% ferrotungsten were concentrated at 400,000-405,000 yuan/mt, down 5,000 yuan/mt from the previous trading day. Actual market transactions were below online prices.

In the tungsten scrap market, suppliers continued to offload goods as the main trend, with the transaction center declining significantly. Industry sentiment was dominated by fear of high prices, and market circulation was loose. Downstream enterprises primarily engaged in bargain down purchasing. Today, SMM tungsten scrap bar closed at 395 yuan/mt, down 5 yuan/mt from the previous trading day and 45 yuan/kg from last Friday, leading the decline.

In the short term, affected by the previous price rise, fear of high prices in the tungsten market has intensified significantly. Additionally, most hard alloy enterprises are still in the stage of digesting previously restocked inventory, leading to a decline in actual transaction activity. The market is mainly in a stalemate, awaiting guidance from the new round of long-term contracts. From the upstream mine side, the core expectation of tight supply remains unchanged. The domestic policy controlling the total tungsten concentrate mining volume continues, with limited release of new capacity. Actual production has fallen short of expectations, and overall market supply lacks elasticity. As downstream enterprises gradually consume their previously restocked inventory, if no substantial increase in supply from the mine side is released subsequently, the supply-demand pattern will further tilt toward a tight balance. It cannot be ruled out that tungsten prices may initiate another strong upward trend after inventory destocking is completed.