[Tungsten News] SMM, July 6: Today, the domestic tungsten raw material market was mainly in the doldrums. Last Friday, a mine in Guangdong auctioned 43 standard tonnes (65% WO3 basis) of low-grade tungsten concentrates, which ultimately failed to attract any bids. Inquiries were sluggish, and with considerable market uncertainty, traders were less willing to enter the market. Smelters mainly restocked based on long-term contracts and rigid demand. Spot orders were concluded at transaction prices below the online price, with some deals done at 430,000–450,000 yuan per standard tonne (65% WO3 basis). According to the SMM survey, China’s tungsten concentrates production edged down MoM in June, mainly because safety inspections in Jiangxi and Hunan caused a slight decline in output at some mines. In addition, some small mines in Henan also reduced or suspended production due to reasons such as the exhaustion of first-half quotas. In July, with the flooding season in south China, tungsten concentrates production was expected to remain at low levels. However, amid sluggish shipments across the industry in Q2, there was still some inventory in the tungsten concentrates market waiting to be cleared. This week, attention will focus on long-term contract information in the industry and changes in downstream restocking sentiment.

In June, global scrap tungsten markets diverged. India followed China's tungsten price rally, with active trading and higher prices in mid-June before cooling as China softened. Europe saw low-level consolidation due to high speculative inventories, but prices began to edge up in late June as stocks cleared. China's tungsten market experienced a sharp rebound followed by a pullback, and is expected to consolidate in the near term, while medium-to-long-term fundamentals remain solid.

According to SMM statistics, on July 2, aluminum billet inventory in China's mainstream consumption areas dropped to 130,000 mt, down 4,000 mt from last Monday and 10,000 mt from last Thursday, with the destocking pace accelerating markedly. Compared with the same period, it was 23,500 mt lower than in 2025 and 9,700 mt lower than in 2024, pushing total inventory to the lowest level for the same period in the past three years. In terms of warehouse withdrawals,

The MHP market was tight overall this week, with nickel and cobalt payables staying high. On the supply side, after the strait reopened, production at some producers recovered somewhat but remained below previous levels, and quotes stayed high under cost pressure. On the demand side, mid-year downstream nickel and cobalt salt prices showed weakness, and producers faced significant pressure from losses. Salt producers had relatively low acceptance of high-priced MHP, putting pressure on MHP payables. Given weak downstream product prices, MHP payables may pull back in the short term. The high-grade nickel matte market also saw supply-demand weakness on both sides. High-grade nickel matte currently has a clear cost advantage over MHP, but on the supply side, major producers have already signed long-term contracts, leaving limited available spot supply. On the demand side, actual consumption capacity is insufficient due to restrictions in matching downstream production lines. Overall purchasing sentiment was weak, trading activity was low, and payables remained stable. The geopolitical premium in the international sulfur market is gradually being cleared, but supply-side disruptions have intensified. The US-Iran agreement stipulates that the Strait of Hormuz will be unblocked within 30 days, and the resumption of navigation will be a gradual process. Kazakhstan indefinitely suspended sulfur exports from June 27 (only allowed to sell to Russia). Russia extended its export ban to the end of 2026, and Turkey's ban lasts until end-September, compounding short-term supply disruptions. Medium and long-term sulfur prices are expected to be under pressure, but the recovery of supply has a time lag, and prices will swing wildly at highs. Regarding nickel prices, market expectations for interest rate hikes continued to mount at the start of this week, and nickel prices continued to decline. On Thursday, non-farm payrolls data came in below expectations, prompting some recovery. Against a backdrop of lower MHP payables and stable high-grade nickel matte payables, the absolute prices of MHP and high-grade nickel matte edged down along with nickel prices. In addition, MHP cobalt prices and refined cobalt prices also declined. Overall, the intermediate product market will be under pressure in the short term.

[Tianjin Premiums Rise on Contract Rollover]: Spot premiums in Tianjin rose this week, up 10 yuan/mt WoW. As of this Friday, mainstream Chinese brands were reported at a discount of 30-100 yuan/mt against the 2608 contract, high-end brands were at discounts near flat, and Tianjin market was at a discount of about 35 yuan/mt against Shanghai.

In the spot market this week (6.29-7.3), the SMM #1 lead price drifted lower, declining for three consecutive days and cumulatively falling 325 yuan before staging a slight rebound on Friday to recover part of the losses. Amid month-end and mid-year book-closing and inventory checks, downstream battery producers held a strong wait-and-see sentiment, only purchasing small volumes for immediate needs, leaving overall spot order trading sluggish. By region, in Henan, smelters focused on deliveries under long-term contracts, and traders' discount range against the SHFE lead 2608 contract narrowed initially and then widened, with the full-week discount at 130-50 yuan and only sporadic transactions for low-priced cargoes; in Hunan, smelter spot order discounts gradually narrowed from 50-0 yuan to parity, with moderate transactions for low-priced cargoes; supplies in Jiangxi and Anhui remained tight throughout, with offers consistently at a premium of 100 yuan; Yunnan smelters cut prices to clear inventory, with discounts widening to 200-150 yuan during the week.