Tungsten Market Long-Term Contract Support Weakened, Industry Chain Continued to Fluctuate Downward [SMM Tungsten Analysis]

SMM April 21 update:

The Chinese spot tungsten market continued to fluctuate downward today. Mainstream mines mainly fulfilled long-term contracts, with spot orders hard to come by. Prices of tungsten smelting products, tungsten powder, and recycled materials were generally under pressure. Market pessimism spread further. Profit-taking accumulated from earlier high prices continued to be released, compounded by shrinking orders in the downstream cemented carbide and cutting tool industries. End-user procurement nearly stalled, and the market remained in a state of unrelenting upstream selling pressure and shrinking downstream buying volumes, with the overall trading atmosphere remaining sluggish.

Ore side: Today, SMM 65% wolframite concentrates quotations held steady at around 880,500 yuan/standard tonne (65%WO3 basis). On April 20, two major leading enterprises in Jiangxi successively released their long-term contract prices for the second half of April. Jiangxi Tungsten Enterprise Group set its 65% wolframite concentrates long-term contract at 910,000 yuan/standard tonne (65%WO3 basis), down 46,000 yuan/standard tonne (65%WO3 basis) MoM. Another tungsten enterprise in Chongyi simultaneously lowered its second-half-of-April 55% wolframite concentrates long-term contract quotation to 885,000 yuan/standard tonne (65%WO3 basis), down 45,000 yuan/standard tonne (65%WO3 basis) MoM. Quotations from both mainstream enterprises were lower than prior market expectations. Confidence in spot order transactions declined, suppliers showed strong selling sentiment, and downstream smelters mostly suspended procurement or pushed for significantly lower prices. Transaction prices for sporadic spot orders in the market had already fallen below 800,000 yuan/standard tonne (65%WO3 basis). Although mines and traders previously made concessions on shipments and some low-priced cargoes were absorbed by smelters on an as-needed basis, overall market circulation still showed an inventory buildup trend, with transactions mostly driven by rigid demand and lacking large-volume deals. As prices pulled back from the historical highs in March, bearish expectations dominated the market. Miners' willingness to hold prices firm weakened, and some suppliers accelerated shipments to cash in, with short-term tungsten concentrates prices remaining under pressure.

Smelting market: Today, SMM APT mainstream quotations were concentrated at 1.365 million yuan/mt, down 15,000 yuan/mt from the previous day. On April 20, a tungsten enterprise in Chongyi set its APT long-term contract price at 1.35 million yuan/mt, down 90,000 yuan/mt MoM. APT producers' quotations generally softened, and the market transaction center continued to shift downward. The support effect from previous long-term contract prices had largely dissipated. Although smelters' raw material procurement costs eased somewhat as tungsten concentrates prices pulled back, the pressure from shrinking downstream orders and accumulating finished product inventories continued to intensify. Some enterprises maintained low operating rates, and the APT market was likely to continue fluctuating downward. Ex-China, the earlier high-level transactions in the European APT market lacked sustainability. As Chinese prices pulled back significantly, the price spread between domestic and overseas markets narrowed notably, export order growth was limited, and the supportive effect on the Chinese market weakened.

Powder market prices generally weakened today. SMM tungsten powder closed at 2,220 yuan/kg, down 10 yuan/kg from the previous day; carbonised tungsten powder was quoted at 2,150 yuan/kg, down 15 yuan/kg. Downstream cemented carbide enterprises had insufficient orders, with moderate raw material inventory, mostly purchasing as needed, lacking motivation for proactive restocking. Some enterprises saw a slowdown in order production schedules, with expectations for the market turning cautious, and quotations loosened accordingly. The powder market overall exhibited a trend of declining both in volume and price.

Scrap tungsten market: Scrap tungsten prices today remained under pressure. SMM scrap tungsten drill bits closed at 880 yuan/kg, down 25 yuan/kg from the previous day; scrap tungsten bars were quoted at 930 yuan/kg, down 40 yuan/kg; scrap tungsten alloy inserts were quoted at 760 yuan/kg, down 10 yuan/kg. Affected by earlier concentrated selling, suppliers had strong risk-averse sentiment and a strong willingness to take profits, with spot cargo transaction prices continuing to decline. Although scrap tungsten alloy smelters engaged in some buying-on-dips restocking, procurement volume was limited and failed to provide effective support. As panic selling gradually exited the market, the market may gradually stop falling, but short-term prices are expected to remain in the doldrums.

Ferro-tungsten: Steel mills had strong wait-and-see sentiment regarding procurement, ferro-tungsten transactions were sluggish, end-use demand for special steel was weak, and production of some tungsten-containing special steel grades declined notably, with the market's weak supply-demand dynamics intensifying. Today, SMM 70% ferro-tungsten mainstream quotations were concentrated at 1.28 million yuan/mt, down 15,000 yuan/mt from the previous day. Although quotations showed some resilience supported by costs, the actual transaction price center continued to shift downward.

In the short term, prices across the tungsten industry chain were overall under pressure, with both primary and recycled tungsten products weakening in tandem, and market pessimism dominated trading. Major enterprises lowered long-term contract prices, further reinforcing bearish expectations in the market. Under the triple pressure of ore inventory buildup, smelting inventory buildup, and weak end-use demand, prices lacked clear support. The tungsten market is expected to continue to fluctuate downward in the short term, with focus this week on mine shipment pace and end-user pre-holiday stockpiling activity.