SMM December 26
The tungsten market rose first and then fell this week. At the beginning of the week, the tungsten market mainly maintained the previous upward trend. On Thursday and Friday, the demand for cash realization in the scrap tungsten market increased, leading to a rise in panic selling, which caused scrap tungsten prices to soften. Coupled with news such as the resumption of production at an APT plant in Hunan, APT traders increased their shipments, and the transaction center pulled back slightly from the previous high levels. During the week, mines in Hunan, Shaanxi, and other regions made shipments, with transaction prices around 451,000 yuan/mt, also down from previous levels. Market wait-and-see sentiment was strong, and with both month-end and year-end approaching, enterprises were closing their books, leading to a decrease in market trading volume.
Ore side: As of December 26, SMM's black tungsten concentrate (65%) closed at 458,000-459,000 yuan/mt, down 2,000 yuan/mt from the previous trading day, and accumulated an increase of 221% within the year. During the week, a tungsten miner in Hunan tendered to sell 70 mt of tungsten concentrate (14-17%), with the final transaction price at 450,700 yuan/mt. A mine in Shaanxi made shipments, with transactions around 451,000 yuan/mt. No shipments were heard from other mines for the time being; attention is on the auction and shipment situation of a mine in Guangdong next week. Approaching year-end, downstream enterprises are mostly focused on capital repatriation, and stocking demand is generally weak. Tungsten ore trading volume is low, and prices are expected to fluctuate rangebound next week.
Ammonium paratungstate (APT): As of now, SMM's APT (≥88.5%) is quoted at 670,000-680,000 yuan/mt, down 5,000 yuan/mt from the previous trading day, and accumulated an increase of 220% within the year. This week, an APT plant in Hunan resumed production, alleviating some market supply concerns. Additionally, price cuts in the scrap tungsten market affected the sentiment of some APT traders, leading some suppliers to offer discounts, resulting in a slight downward shift in spot APT transaction prices. However, mainstream APT producers maintained firm offers with limited room for price concessions. On Thursday, a tungsten enterprise in Guangdong announced its long-term contract prices for the second half of the month, with the APT price raised by 130,000 yuan/mt MoM to 660,000 yuan/mt, which provided some support to the market.
Compared to the volatility in the upstream market, the tungsten powder market performed relatively steadily today, with enterprises mostly maintaining stable offers. Given high enterprise costs, short-term market fluctuations led enterprises to follow upward price movements rather than downward adjustments. As of today, tungsten carbide closed at 1,050-1,070 yuan/kg, accumulating a 241% increase within the year. Tungsten powder prices were concentrated at 1,090-1,120 yuan/kg, accumulating a 250% increase within the year. Powder enterprises maintained firm quotes, and factors such as tight spot order circulation and difficulties in restocking led some hard alloy enterprises to turn to recycled tungsten carbide powder and recycled tungsten materials for relief. Recently, transactions for electrolytic tungsten carbide powder were active, and prices also showed a significant increase. As of today, recycled tungsten carbide powder closed at 890 yuan/kg, up approximately 218% since the beginning of the year.
Ferrotungsten: Ferrotungsten market offers also saw a slight decline today, with strong wait-and-see sentiment downstream and average transactions. Today, the mainstream quotation for 80% ferrotungsten was concentrated at 665,000 yuan/mt, down 5,500 yuan/mt from the previous trading day. FOB offers were at $127 per kg W. The European market was closed for the holiday, leaving room for a significant post-holiday price increase.
Tungsten Scrap: Market sentiment in the tungsten scrap market fluctuated significantly. Some suppliers chose to take profits and exit the market, leading to substantial selling pressure. Large recyclers primarily pushed for lower prices in their purchases. Mainstream transaction prices experienced considerable intraday volatility. Today, the SMM tungsten scrap bar price closed at 607 yuan/kg, down 17.5 yuan/kg from the previous trading day. Tungsten scrap alloy blades and other tungsten scrap products also mostly fell by 10-20 yuan/kg.
Short-term perspective: As the New Year approaches, market views on the tungsten outlook are divided, with strong risk aversion sentiment and a noticeable contraction in transaction volumes. Coupled with the sell-off for cash in the scrap tungsten market, the tungsten market faces renewed risks of a sentiment-driven price correction. In the few remaining trading days of 2025, it is highly unlikely that upstream mines and APT plants will engage in large-scale selling. Powder and downstream tool factories are also largely entering their year-end inventory counting and accounting settlement phase, leading to a decline in restocking demand. Market circulation is primarily centered around long-term contracts. The upstream tungsten market is expected to fluctuate rangebound next week. Medium to long-term perspective: In Q1, domestic mines will gradually release material, but downstream sectors will also enter a new restocking cycle. Before the first batch of quotas is issued, the possibility of mines overproducing and overselling is relatively small, with most maintaining stable sales. Expectations for a looser supply of tungsten ore are also unlikely to materialize. Meanwhile, no concentrated maintenance schedules have been heard of for downstream APT plants recently, indicating stable demand support from the ore side. Additionally, with the pre-Chinese New Year stockpiling season approaching, demand for tungsten ore is still expected to increase before the holiday. Recently, some enterprises also provided feedback regarding the substitution of other materials for tungsten in end-use tools. The mainstream cutting materials in the current market include High-Speed Steel (HSS) tools, cemented carbide tools, ceramic tools, CBN (cubic boron nitride) tools, and PCD diamond tools, among others. From a cost-performance perspective, HSS tools currently have the initial price advantage for substituting tungsten-based cemented carbide materials. However, HSS products are mostly suitable for small-batch, medium-to-low speed processing scenarios and cannot adapt to many high-speed machining environments, possessing certain limitations that make large-scale substitution difficult. While other products can substitute for some cemented carbide applications, their prices are higher than cemented carbide. From an end-user perspective, the market will find it difficult to identify suitable alternative materials to replace tungsten's market share in the short term. Increasing the recycling of tungsten scrap may alleviate some of the high-cost pressure on the raw material side, but tungsten scrap inventory is gradually being cleared after this wave of selling. Overall, SMM expects that the tungsten market will still experience a situation of tight upstream supply in Q1 from a supply-demand perspective, thereby driving the entire tungsten market to hover at highs.
