Tungsten is an essential component in several key industrial applications, as a result of its high melting point, high density, hardness, and thermal and chemical stability. Approximately half of mined supply is used to create tungsten carbide; secondary uses include electronics and specialist steel alloys.
In the 1990s, oversupply characterised the tungsten market. Stockpiles were built up by producers and governmental organisations, which acted as a brake on price rises. The majority of stockpiled tungsten has since been consumed and tungsten prices have correlated closely to underlying supply/demand fundamentals since 2005.
Approximately 60,000 to 65,000 tonnes of primary tungsten metal is produced per year, equivalent to 75,000 to 83,000 tonnes of tungsten trioxide (WO3). Several new mine projects are due to come on stream between 2013 and 2016 (Roskill forecasts that output could reach 100,000 tonnes by 2016). Demand is expected to continue to 2016 and beyond, putting further pressure on supply.
Over 80% of mined production (50,000 tonnes/year) is produced in China. In 2000, China began the process of controlling its tungsten industry through the imposition of production and export quotas, and the removal of export rebates. The Chinese market has recently become a net importer of tungsten concentrates as a result of rapidly increased industrial output. Domestic consumption is forecast to grow by 8% annually.
Tingseten APT Prices (US$ per metric tonne)
Ammonium Paratungstate (APT)
APT is the main intermediate and also the main tungsten raw material traded in the market. APT is usually calcined to yellow (WO3) or blue oxide (WO3-X; a slightly substoichimetric trioxide with varying oxygen content). The tungsten concentrate price is based on the APT reference price. Over the last three years the price of APT has increased by 100%, reflecting a tightening of supply versus demand.
Tungsten prices have more than doubled since the beginning of 2010 and are currently in the region of US$450 to US$460 per metric tonne of APT (an intermediate tungsten product). Given strong market fundamentals, this price range is expected to continue for the foreseeable future.