Recently, with the ongoing depletion of inventories among downstream buyers and the resurgence of procurement demands, tungsten prices have begun to climb steadily, positively impacting the performance of tungsten producers. However, industry experts remain somewhat skeptical regarding the sustainability of this upward trend. While there are signs of improvement, the future trajectory of tungsten prices will largely hinge on the strength of downstream demand.
In a recent development, China Minmetals increased its tungsten concentrate guidance price by 65%, raising it to 125,000 yuan per ton. Similarly, the Ganzhou Tungsten Industry Association in Jiangxi Province hiked its November offer from 10.7 tons to 11.6 tons. This marks a respective 13.6% and 8.41% increase in prices for tungsten concentrates from these entities. Following a steep decline in September, this marks the second consecutive month of recovery, with prices climbing back by around 15%.
According to Bai Chuan Information’s tungsten analyst, Zheng Yueguang, "Since April, tungsten prices have been in a downward spiral, prompting downstream APT producers to halt operations temporarily to reduce excess inventories. This situation persisted until October." He further noted that historically, tungsten prices typically enjoy a seasonal boost during the "Golden September, Silver October" period, which is traditionally a peak sales season. However, this year's prices have continued to fall, nearing the production costs of many enterprises. Consequently, numerous firms are reluctant to sell at lower margins and are instead choosing to build up their stockpiles.
As the inventories of downstream enterprises are gradually consumed, the demand for restocking is slowly emerging, driving tungsten prices upward. An industry insider explained that this price hike can be attributed to two 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. Additionally, both China Minmetals and the Ganzhou Tungsten Industry Association have intensified their guidance prices for tungsten concentrates, signaling an effort to influence market expectations positively.
In early October, the official website of the Jiangxi Provincial Government announced the establishment of a province-wide industrial and foreign trade promotion mechanism aimed at fostering production and growth. Among other initiatives, this includes measures to store and preserve strategic resources such as copper, tungsten, and rare earths produced by state-owned enterprises. This move positions Jiangxi as the second province, after Yunnan, to implement such resource preservation strategies.
Looking ahead, while the current price increases are encouraging, the long-term outlook for tungsten remains contingent upon sustained demand and the ability of major players to maintain pricing stability. The industry is closely watching how these developments unfold, especially as winter approaches, which could impact supply chains and market dynamics further.
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