Tungsten prices may not have peaked Tungsten prices rose strongly throughout 2010 and most of 2011, as most of the economies outside China recovered from the credit crisis-induced recession and demand for tungsten increased in parallel. At the end of September 2011, prices for Chinese APT had reached US$450-460/mtu, compared to US$330/mtu at the beginning of the year and US$200/mtu at the beginning of 2010. APT prices are now well above the previous peak of US$300/mtu in June 2005.
Roskill expects to see a market fluctuating around an equilibrium level, but forecasts the market to be in deficit in both 2011 and 2012, before new supply enters the market. Currently, Roskill expects 2013 to be the tipping point where supply overtakes demand in the tungsten market at some point during the year. Assuming that the majority of planned projects reach production, then a surplus is expected to develop, although any further delays to new supply entering the market would quickly see a deficit forming and prices would remain higher than in the forecast (probably into 2014).
Given the current levels of APT prices, Roskill expects that the average for the whole of 2011 will rise to a forecast US$430mtu by the end of the year. Very few of the significant new tungsten projects are expected to deliver any substantial tonnages of tungsten in 2012, so the market will be relying on existing producers to cope with any growth in demand. As a result, Roskill predicts a further tightening in supplies of tungsten and, therefore, further price rises, with an average APT price of US$475/mtu.
Prices are expected to ease between 2013 and 2015 as the bulk of planned new tungsten production capacity is expected to enter the market. Demand for tungsten is expected to continue to grow to 2016 and beyond, putting further pressure on the supply side and requiring more new capacity.
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