Tungsten raw material market supply tightens sharply at year-end Tungsten market surges consecutively [SMM Tungsten Daily Review]

SMM December 18

This week, the tungsten market continued its sharp rally. As the year-end approaches, supply from mines has decreased sharply. Only some mines in Yunnan, Hunan, etc., conducted auctions for shipments this week. Shipments from mainstream mines were relatively low, spot transaction prices surged significantly, and trading volume shrank noticeably. Many downstream APT producers underwent maintenance, and long-term contracts account for a relatively large proportion in the industry, leading to a sharp increase in spot APT transaction prices at the 10,000-yuan level and tight supply. Downstream powder enterprises raised their prices following the increase in raw material costs. The tungsten powder market has already stabilized at a high level of 1,000 yuan/kg today.

Mine End: As of December 18, SMM black tungsten concentrate (65%) closed at 426,000-427,000 yuan/mt, up 10,000 yuan/mt from the previous trading day, with a cumulative increase of 97,000 yuan/mt within the month. Available quota volumes from mainstream mines in Hunan, Jiangxi, etc., domestically were relatively low, and market circulation was tight. Only some mines concluded shipments during the week. Traders and downstream enterprises found it difficult to restock, and the bargaining range for scattered transactions was relatively large. Today, transaction prices for some ore reached a high of 430,000 yuan/mt.

Ammonium Paratungstate (APT): Today, SMM ammonium paratungstate (≥88.5%) was quoted at 620,000-640,000 yuan/mt, up 10,000 yuan/mt from the previous trading day, with a cumulative increase of 130,000 yuan/mt within the month. Many APT plants in Hunan, Jiangxi, etc., entered annual maintenance, leading to tight APT market supply. Operating enterprises primarily focused on guaranteeing long-term contract supply. Downstream powder enterprises faced difficulties in procurement, and market pricing tilted significantly towards suppliers. Many producers held back from selling, while some traders' offers remained firm. In the afternoon, transaction prices concentrated towards highs above 650,000 yuan/mt. Overseas downstream enterprises recently showed insufficient firm order follow-up due to reasons like the Christmas holiday, and the APT price fluctuated relatively little compared to earlier periods.

Amid significant fluctuations on the cost side, powder enterprises entered a wait-and-see state regarding order intake, and offers also fell into a case-by-case negotiation pattern. Firm bids awaited follow-up. Tungsten carbide was quoted at 960-980 yuan/kg, and tungsten powder prices concentrated at 1,000-1,030 yuan/kg. Downstream hard alloy purchases were mainly for essential restocking.

Ferrotungsten: The ferrotungsten market mainly followed the upward trend of the raw material market. Producer operating rates were low, mainstream enterprises negotiated prices on a case-by-case basis, and procurement from downstream steel mills was limited. Today, mainstream quotations for 70% ferrotungsten concentrated at 570,000-580,000 yuan/mt, up 10,000 yuan/mt from the previous trading day. FOB offers were at $115/kg W, and the center of European ferrotungsten offers had risen to around $105/kg W.

Tungsten Scrap: Trading in the tungsten scrap market was cautious. Amid the sharp rally in the mine sector, suppliers' offers remained firm. Some suppliers, facing significant capital pressure, chose to reduce inventory for turnover. Today, SMM tungsten scrap bars closed at 590 yuan/kg, with a cumulative increase of 119 yuan/kg within the month.

Short term, the domestic tungsten ore market faces multiple supply disruptions, including reduced available mining quotas, declining shipments from tungsten mines by year-end, and unstable imports. Overseas, factors such as reduced output from Vietnamese mines, no short-term new mine additions, the EU and US listing tungsten as a strategic metal, and rising demand contribute to a prominent global tungsten supply-demand imbalance. This situation is unlikely to resolve quickly, with tungsten prices expected to hold up well. Attention is on the long-term contract price guidance from major domestic enterprises and institutions on December 20. Medium and long-term, monitoring domestic tungsten mining policy trends and downstream price transmission remains necessary.