Pre-Holiday Tungsten Market Sees Increased Sales Demand, Short-Term Pressure on Tungsten Market, Downstream Restocking Still Requires Attention [SMM Tungsten Daily Review]

SMM September 23,

Today, the tungsten market was mainly in the doldrums. With the implementation of long-term contracts by major tungsten enterprises, transaction prices for tungsten concentrate and tungsten products generally closed below long-term contract prices. Spot transactions for tungsten concentrate were scarce, with some tax-exempt tungsten concentrate trading at lower prices. Ammonium paratungstate (APT) enterprises mostly shipped according to long-term contracts, with quotations concentrated in the range of 395,000-400,000 yuan/mt. Some traders increased their pre-holiday cash-out demands, leading to lower prices below 390,000 yuan/mt. After a period of decline, the scrap tungsten market showed signs of stabilization, with expectations of tightening supply and cautious trading sentiment.

Mine end: As of September 23, SMM black tungsten concentrate (65%) closed at 272,000-273,000 yuan/standard ton, down 3,000 yuan/mt from the previous trading day, and cumulatively down 15,000 yuan/standard ton from the previous high. Currently, the domestic tungsten concentrate spot market is dominated by tax-exempt transactions, with limited shipments from mainstream mines. Downstream views on the future market are mixed, leading to a sharp drop in procurement enthusiasm. This week, multiple enterprises in Jiangxi and Xiamen released long-term contract prices, with 65% black tungsten concentrate priced at 272,000 yuan/standard ton, and most spot transactions closing below the long-term contract price.

Ammonium Paratungstate (APT): Today, SMM APT (≥88.5%) was quoted at 395,000-405,000 yuan/mt, down 2,500 yuan/mt from the previous trading day, and cumulatively down 15,000 yuan/mt. APT transaction prices were under pressure, and major tungsten enterprises reduced long-term contract prices by 10,000 yuan/mt, leading to a downward shift in spot negotiations. Some suppliers increased pre-holiday cash-out demands, focusing on selling at lower prices. APT enterprises, facing high costs, primarily shipped according to long-term contracts, while downstream powder enterprises purchased as needed. Recently, the overseas tungsten market has been continuously catching up. As of today, European APT (-) 570-650 (-) $/mtu (equivalent to 359,000-409,000 yuan/mt), with the price spread between domestic and overseas markets continuing to narrow. Affected by the continuous decline in raw material prices, powder transactions decreased, and prices mostly followed the decline in raw materials. As of today, SMM tungsten carbide powder closed at 610 yuan/kg, and tungsten powder closed at 630 yuan/kg, down 5 yuan/kg from the previous trading day. Downstream cemented carbide enterprises mainly restocked based on rigid demand, driven by bearish sentiment, with long-term contract transactions dominating and limited spot transactions. In the absence of competitive overseas prices, overseas offers for tungsten powder have decreased. According to customs data, domestic tungsten powder exports in August declined 14.6% MoM to around 143 tons.

Ferro-tungsten: Due to the significant decline in the scrap tungsten market, the cost support for the ferro-tungsten market collapsed, and transaction prices continued to fall. Today, the mainstream quotation for 70% ferro-tungsten was concentrated in the range of 395,000-405,000 yuan/mt, down 3,000 yuan/mt from the previous trading day, and cumulatively down 8,000 yuan/mt. Actual market transactions were below online prices. European ferro-tungsten prices also experienced a slight correction, with this week's European ferro-tungsten closing at 80-84 $/kg W, down 1.875 $/kg W WoW.

Today, the tungsten scrap market mainly fluctuated rangebound. As previous inventory was cleared, tungsten scrap traders' inventory declined, and enterprises mostly transacted at stable prices. However, upstream ore prices were weak and rangebound, and the overall trading atmosphere in the industry remained cautious. Today, SMM's tungsten scrap bar closed at 377 yuan/kg, down 3 yuan/kg from the previous trading day, with a cumulative decline of 63 yuan/kg, ranking among the top declines.

Short-term, the overall tungsten market is mainly under pressure. Downstream sectors are mostly digesting previous inventory, and pre-holiday restocking demand is weak. Ore and some tungsten smelting product suppliers still have cash-out needs before the holiday, leading to continuous soft declines in spot order transaction prices due to low-price sales. The market is expected to remain weak and rangebound. Medium and long-term, since July, domestic tungsten concentrate market prices have risen rapidly, driving a significant increase in imports of overseas tungsten raw materials. From January to August, total domestic tungsten concentrate imports reached 11,600 mt, up about 4,960 mt YoY. With stable imports of Kazakh ore, domestic tungsten concentrate imports are expected to maintain a monthly average supplement of over 2,000 mt, with a full-year increase of over 7,000 mt YoY, partially offsetting the reduction in domestic mining quotas. From a balance perspective, the total supply of domestic plus imported tungsten concentrate still falls short of covering the increased downstream demand this year, and a tungsten concentrate deficit is expected, supporting the tungsten market in maintaining high-level consolidation.