Recently, the tungsten market has shown signs of recovery as downstream buyers' inventories have continued to deplete and their procurement demands have resurfaced. This has driven tungsten prices into an upward trajectory, positively impacting the financial performance of tungsten producers. Nevertheless, market experts remain somewhat skeptical about the sustainability of this price increase. While the current momentum appears promising, its continuation hinges largely on the strength of downstream demand.
In a notable development, China Minmetals recently increased its tungsten concentrate guidance price by 65%, setting it at 125,000 yuan per ton. Similarly, the Ganzhou Tungsten Industry Association in Jiangxi Province adjusted its November offer for ammonium paratungstate (APT) from 10.7 tons to 11.6 tons. These adjustments reflect a significant 13.6% rise for China Minmetals and an 8.41% increase for Yanzhou Tungsten Industry. Following the price slump in September, this marks the second consecutive month of recovery, with prices climbing back by approximately 15%.
According to Bai Chuan Information’s tungsten industry analyst, Zheng Yueguang, "Since April, tungsten prices have been in a downward spiral. Downstream APT producers have paused operations to deplete their higher inventories, a situation that persisted until October." He added, "Historically, the tungsten market experiences a seasonal uptick in 'Golden September, Silver October,' but this year's prices have continued to fall, nearing the production costs of many enterprises. Consequently, companies are reluctant to sell below cost and are beginning to stockpile."
As downstream enterprises gradually exhaust their inventories, the need for restocking is slowly emerging, pushing tungsten prices upwards. The recent price hike can be attributed to several factors: first, in mid-October, the Jiangxi Provincial Government announced plans to safeguard strategic resources like copper, tungsten, and rare earths produced by state-owned enterprises within the province, including measures for storage and conservation. This initiative aligns Jiangxi with Yunnan as provinces prioritizing resource preservation. Additionally, both China Minmetals and the Ganzhou Tungsten Industry Association have strengthened their guidance prices, signaling intentions to influence market expectations.
In early October, the Jiangxi Provincial Government officially announced the establishment of an industrial and foreign trade promotion mechanism aimed at fostering production and growth. Among its eight key initiatives is the inclusion of strategic resources such as copper, tungsten, and rare earths under state-owned enterprise storage programs. This move underscores the growing importance of resource management in China’s economic strategy.
While the short-term outlook remains optimistic, long-term trends will depend heavily on broader economic conditions and the ability of downstream industries to absorb these price increases without reverting to alternative materials or reducing consumption. For now, though, the market seems poised for a gradual recovery, driven by both supply-side constraints and strategic policy interventions.
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