LONDON, May 1, 2019 /PRNewswire/ -- Tungsten is a vital ingredient used in a wide range of final products. Its special qualities in some key end-uses make it difficult to replace. However, it is not a demand concern that keeps market participants worried, but one more fundamental to any resource market: will there be enough supply? In this Insight we explore the current supply outlook and review some of the major risks to the supply base.
Tungsten is a high-priced commodity, which is consequently used only in products where its performance justifies the cost of the raw material. This includes cemented carbides, high alloy steels and superalloys, electrical and electronic applications. Due to this wide range of applications, total tungsten demand is driven by a combination of developments in the broader world economy (industrialisation).
The tungsten industry has undergone tremendous change. In the last quarter of the twentieth century, sales from the US and later ex-Soviet government stockpiles, plus uncoordinated production from many small-scale Chinese mines, led to oversupply in the tungsten market. This resulted in market prices being depressed to the point where all but a handful of mines outside of China closed.
Western processors and consumers consequently became increasingly reliant on Chinese tungsten concentrates and other products. However, in the 2000s the Chinese government sought to restrict the export of tungsten products, resulting in higher prices and concerns over the security of supply for non-Chinese tungsten processors and consumers.
Since 2013, the world (ex-China) refined tungsten market balance has been negative and relatively static at roughly -13,000 t/y (tonnes per year). With the depletion of stockpiles and this negative balance holding up prices, in the last two years, industry attention has turned again to tungsten. Decreases in supply from existing producers have exacerbated supply shortages and have been caused by a variety of factors, including environmental regulations in China.
Will supply growth be sufficient?
China remains the largest supplier of tungsten so what happens in China has important repercussions for overall tungsten supply growth. The depletion of Chinese domestic resources is fostering doubts about China's long-term ability to supply and CRU forecast Chinese production will continue to decrease.
Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2019/whose-tungsten-projects-will-satisfy-growing-demand/
Read more about CRU: http://bit.ly/About_CRU
About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.
CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004 and Singapore in 2018.
When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
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