Tungsten Price
Tungsten Price
It is unarguable that the minor metal tungsten is subject to price manipulation schemes- but to what degree? Tungsten is not publicly traded on the London Metal Exchange, or any exchange for that matter, so prices are found in the balance of supply and demand drivers. China is responsible for an estimated 85% of world production; the country also has the highest demand for the metal used in industrial and military equipment. Depending on whom you ask, at best, Chinese pricing is opaque; at worst, there may be widespread price manipulation. With lack of a trading exchange, and one country with a monopoly on the market, tungsten prices have seen very wide price swings.
China’s strength in the market has been more than apparent. The country has gone through periods in the past where it undertook predatory pricing that wiped out almost all Western production of the metal. At the same time, China has closed its ports to the export of the metal when regional demand reportedly picked up. Currently, China’s domestic market has increased a vast amount and is now absorbing most of the internal production. It no longer needs to sell at a loss or generate foreign reserves and has gone from offering exporters credits on sales of concentrate to charging excise in the past couple of years. In 2007 China suddenly slashed export quotas not once, but twice. The first time the reduction was by 500 tonnes, and the second time by 400 tonnes. At the same time, there is a production glut in the rest of the world after decades of Chinese predatory pricing wiping out international mines.
Moving forward it is anticipated that the Chinese will become even stingier as too how much Tungsten they are willing to export. The Chinese only have 15 to 20 years of remaining tungsten ore reserves, according to the head of the Chinese Tungsten Association; with continued growth in demand and no new projects coming online anytime soon, the outlook for tungsten is quite positive. Over the past 10 years tungsten prices have climbed more than 300% to average $254.50 per metric ton unit of ammonium paratungstate (a product of tungsten concentrates).
