Many Tungsten Companies Lower Long-term Order Prices Again After Half a Year [SMM Comments]

Tungsten prices have been rising for more than half a year, with overall price increases of about 30% across the tungsten industry chain, from tungsten ore and ammonium paratungstate to tungsten powder and ferrotungsten. The continuous rise in tungsten prices has kept many downstream manufacturers reluctant to stockpile raw materials in advance, operating based on sales. This has limited market trades, causing tungsten prices, which had been supported by tight raw material supply for more than half a year, to show signs of falling. Many tungsten companies began lowering long-term order prices in early June.

Jiangxi Tungsten, Zhangyuan Tungsten, and other tungsten companies lower long-term order prices

SMM learned that Jiangxi Tungsten, Zhangyuan Tungsten, and a large tungsten company in Fujian all lowered their long-term order prices for early June.

Jiangxi Tungsten's guidance price for first-grade black tungsten concentrate in early June 2024 is RMB 153,000/mt (the guidance price for the second half of May was RMB 156,000/mt).

According to the official WeChat account of Chongyi Zhangyuan Tungsten, its long-term procurement prices for early June are as follows: 1. 55% black tungsten concentrate: RMB 151,000/mt, down RMB 5,000/mt from the previous round of prices; 2. 55% white tungsten concentrate: RMB 150,000/mt, down RMB 5,000/mt from the previous round of prices; 3. Ammonium paratungstate (primary grade): RMB 225,500/mt, down RMB 7,500/mt from the previous round of prices. (Note: The above prices include 13% VAT).

Ganzhou Tungsten Industry Association's June 2024 tungsten market forecast prices: black tungsten ore (55% grade) RMB 151,000/mt, APT RMB 225,500/mt, medium-grain tungsten powder RMB 342/kg.

Black tungsten concentrate prices fell by 2.56% in less than half a month

According to SMM data, the price of black tungsten concentrate (≥65%) on June 7 was RMB 152,000-153,000/mt, with an average price of RMB 152,500/mt.

Before the long-term order prices were finalized this month, there was only a small amount of procurement, causing tungsten prices to show signs of decline. From the historical trend of tungsten prices, the average price of black tungsten concentrate (≥65%) reached a high of RMB 156,500/mt on May 21 and remained stable until May 24. From May 27, the average price began to show a slight pullback, and as of June 7, the average price of RMB 152,500/mt was down RMB 4,000/mt from the high of RMB 156,500/mt on May 24, a drop of 2.56%.

Outlook

From the supply side, many companies halted production for maintenance due to previous environmental protection inspections. As most companies resume production after rectification, the supply is expected to see some increase. Additionally, tungsten concentrate imports have become a way for some companies to ease tight tungsten ore supply. On the demand side, although the demand for tungsten in the PV industry is expected to be a bright spot, the high tungsten prices and the losses of the tungsten industry chain downstream limit the acceptance of high tungsten prices. To survive, companies can only seek low-price sources as much as possible. SMM predicts that weak downstream demand may still leave room for tungsten prices to fall in the future.