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Tungsten
Outlook to 2029, 14th
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Publication Date: 31/03/2020

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China has for several decades been the

world’s largest mine and refined producer of
tungsten, accounting for just over 80% of
mine output in 2019, according to Roskill
analysis, or some 61kt of contained tungsten
metal. It is similarly dominant in the
production of the tungsten intermediates
ammonium paratungstate (APT) and tungsten
oxide, and of tungsten metal powder and
tungsten carbide. A large proportion of this
output feeds the country’s substantial
cemented carbide tool sector, but there is
also sizeable export of tungsten refined and
finished products to the rest of the world — 
making Chinese mine and refined production
of tungsten integral to conditions in the global
market.

Upstream and refined tungsten supplies were

thus substantially interrupted in 2017 and
2018, when the Chinese government
launched a widespread programme of
environmental reforms, focused across a
swathe of Chinese industries and notably at
tungsten mine and smelter sites. There was
an immediate effect on tungsten availability,
with APT prices buoyed to several-year highs;
in September 2017 the European APT price
peaked above US$300/mtu, having only
recovered to US$200/mtu at the start of the
year.

The turnaround in tungsten market fortunes

continued into the first half of 2018 as
environmental clampdowns in China
continued. Year-on-year demand for tungsten
also rose by nearly 5%, contributing to
tightness in supply. APT prices peaked at
US$350/mtu in June 2018, before declining
steadily throughout the second half of the
year as most large-scale tungsten mines and
APT smelters returned to the market.
A second factor behind falling APT prices was
falling output from the Chinese automotive
sector, which emerged in the second half of
2018 and continued into 2019. Chinese car
production is estimated to have fallen 9% y-o-
y between 2018 and 2019, with output in 2019
dropping to 19.6M vehicles; the first time in
three years the level has dipped under 20M.
Car production is an important end-use sector
for tungsten-containing tools, in addition to
electrical contacts.

The other major Chinese influence on

tungsten market fortunes in recent years — 
large stocks of APT resulting from the defunct
Fanya Metals Exchange — saw a partial
resolution towards late 2019 as the
inventories were successfully auctioned off by
the Kunming Intermediate People’s Court in
September. The stocks, equivalent to 30% of
China’s APT production in 2018, had
contributed to poorer market sentiment in
the second half of 2019, also weighed down
by continued weakness in several tungsten
end‑use markets but principally automotive
and mobile phone sectors.
The winning bid by China Molybdenum was
not anticipated by the market and with the
unit price achieved in excess of the court
guidance, sentiment improved and
immediately spurred a jump in the European
APT quotation to US$240/mtu in October
2019. Prices remained at this level through to
January 2020 and may remain at higher levels
after the Chinese Spring Festival when
companies return to the market.

Looking ahead, the tungsten market faces

several headwinds, including a potential
sustained downturn in car production, which
ultimately consumes about a third of all
tungsten units. In addition, market sentiment
remains subdued by the ongoing trade
dispute between the USA and China. In May
2019, US President Donald Trump pushed
ahead with a 25% tariff rate applied to
US$200Bn of Chinese exports,
effective 10 May 2019, affecting a host of
chemical, metal and finished products,
including ferrotungsten and
tungsten‑containing tools. A resolution to
trade discussions would be a major boost for
tungsten markets.

There remain bright spots for the industry,

however, with aerospace and electronics
markets (users of tungsten alloys and mill
products, respectively) set to continue
growing strongly. In addition, there are
opportunities further up the supply chain for
new mine projects to come online. Several
large mines in China and Russia are reaching
their end of life and will need to be replaced
for the market to remain adequately supplied.
Almonty’s Los Santos mine in Spain also
ceased mining in mid-2019 and will move to
We're which
tailings reprocessing, Online!is expected
Chatto
now

reduce volumes from this operation.

Roskill experts will answer your

questions…

What are the likely supply developments

across existing operations?
Which projects are in the pipeline?
How will Chinese environmental policies
affect the country’s tungsten sector?
How is demand from the automotive and
electric vehicle industry likely to develop
and how will this affect the tungsten
industry?
How is demand across steel and alloys, mill
products and chemicals industries likely to
develop in the next decade?
What is the outlook for the market balance
and prices?

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