The price of tungsten has increased dramatically on tight export controls from China, the producer of approximately 90 percent of world supply. The price of tungsten APT is currently being quoted around $485 per tonne, up from $261 per tonne last October. The tight Chinese export controls and increasing demand for tungsten, which has few substitutes, has made tungsten one of the most interesting stories in commodities.

The market for tungsten has been exploding over the last year. The majority of the increased demand for the metal in the developed countries comes from traditional carbide tools used in drill bits and other heavy duty equipment.

“Several factors are supporting demand. 45 percent of tungsten used in China is for carbide tools and equipment, compared to 70 percent in developed countries. China is looking at increasing tungsten use in order produce better quality tools and equipment. Obviously, oil prices drive drilling and tungsten is used in drill bits,” stated Monet.

With the current high prices of tungsten consumers of tungsten are not concerned with finding substitutes. Instead, consumers are simply trying to find steady supply of the metal. “When we attended the ITIA International Tungsten Conference we asked participants at what price would be level for substitute products? The answer was, we are not concerned with the price, we are more concerned with where we will get tungsten from,” stated Monet.

Supply deficits have been exacerbated by Chinese trade policy, through tight export controls. “There is no reason whatsoever for China to start exporting tungsten,” stated Monet, adding, “If a user wants to use China’s tungsten, they must have a facility in China and use it to build value-added product.” While the export quota for tungsten was raised by 7,000 tonnes for the year, it has brought little relief to end users.
Bango