Price and output analysis
In 2022, China tightened rules on environmental protection and operational safety. Since Pan-Asia APT inventory was nearly exhausted, and the inventory of various Chinese enterprises was generally low, the supply of tungsten in the market was relatively tight. Impacted by the Covid-19 epidemic, the tungsten market price fluctuated but overall maintained an upward trend. In 2022, the average price of 65% wolframite concentrate in the Chinese market was 113,800 yuan/ton, up 10.93% year on year. The average price of ammonium paratungstate (APT) was 173,400 yuan/ton, up 12.3% year on year. The average APT price in the European market is $342 / MT, up 18.19% year on year.
Figure 1. Tungsten Concentrate Price in China, 2020-2022 (Unit: Yuan/ton)
Figure 2. Ammonium Paratungstate (APT) Price in China, 2020-2022 (Yuan/ton)
Figure 3. APT Price in Europe, 2019-2022 (Unit: USD/MT)
In order to conserve mineral resources, the Ministry of Natural Resources of China issues an annual quota for the total amount of tungsten mining and redistributes it between various tungsten mining enterprises. This keeps output of tungsten concentrate stable. According to the China Nonferrous Metal Industry Association, output of tungsten concentrate (65% tungsten oxide) in China in 2022 was 127,305 tonnes. Including unreported production, domestic production is estimated to be 132,000 tonnes, down 4% year on year. Jiangxi province, Hunan and Henan provinces are the main tungsten producing areas , accounting for 83% of China’s output. Antaike’s analysis does not project much change in tungsten concentrate output in the next few years, and new output will mainly come from improvements in recovery rates and capacity utilisation at existing mines.
Import and export data
According to China customs statistics, China exported 24,794t of tungsten products in 2022, a year-on-year growth of 3.15%; and imported 4,964t, a year-on-year growth of 11.65%. Average monthly export of tungsten products in 2021-2022 exceeded 2,000 tonnes. Of concern is the slowdown in overseas demand in 2023, with export volumes expected to decline slightly.
Market prospects
Global growth is expected to slow further in 2023, as energy shocks stemming from the Ukraine conflict continue to spur inflation and as the U.S. interest rate hikes continue, according to OECD forecasts. The global economy is expected to improve in 2024.
In the Chinese market, with the gradual optimisation of epidemic policies, China’s new government leadership has introduced a series of economic policies to promote the development of China’s domestic economy. China’s tungsten consumption will continue to recover in 2023, but the overall global economy will slow down in 2023, and we expect a slight global oversupply in 2023-2024.
After more than 100 years of mining, China has consumed a significant portion of its wolframite resources, and most of the resources mined now are scheelite. Compared with overseas tungsten mines, the cost of mining in China is high, which leads to factories shutting down in periods of low sales prices and unstable raw material supply. Tungsten is a scarce strategic resource, and the world pays more attention to strategic resources. Tungsten resources will eventually reflect its scarcity and strategic value, and the price of tungsten will stabilise at a higher level. We estimate that the price of tungsten concentrate will average 115,000 yuan/tonne and the price of APT will average 175,000 yuan/tonne in 2023.
By Mr. Li Chengchen
China Non-Ferrous Metals Industry Association Minor Metals Branch, Beijing Antaike Information Co., Ltd.
