Industry article - scrap metal tightening. Good to be producing...

Industry article - scrap metal tightening. Good to be producing NOW.


Tungstenscrap, concentrate tightness pushes APT price to near two-year high

Publishedby: Ewa Manthey

15Feb 2021 @ 17:14 UTC

Tighteningavailability and rising prices of tungsten scrap and tungsten concentrate havesupported the tungsten intermediates price to rise to its highest level inalmost two years.

Fastmarketsassessed the tungsten APT, 88.5% WO3 min, cif Rotterdam and Baltimore price at$250-255 per mtu on Friday February 12, unchanged from the previous week’sassessment but up almost 9% from the start of the year at $230-235 per mtu. Themarket is now trading at its highest level since June 2019.

“Theintermediates market is being pushed up by scrap and raw materials tightness,”a supplier said.

APTprices traded under pressure for most of last year with most end users out ofthe spot market amid persistently weak demand for tungsten products, whilelimited volumes of material were being shipped out of China.

Scrapavailability has tightened because industrial operations were interrupted byshutdowns aimed at curbing the spread of Covid-19 during the first half of2020, and then reduced demand after the pandemic clouded the outlook for demandand industrial recovery.

Primarymetal prices have come under pressure from similar uncertain demand, meaningprices for primary material are appealing to buyers, while related scrap pricesare unappealing to sellers.

“Withless production over the past year there has been less scrap circulating in themarket. The demand for scrap exceeds the demand for other feed and when it’stight it impacts everything else,” a consumer said.

“Thescrap situation is dire,” a supplier said. “Buyers can’t get hold of enoughscrap physically and they need to either buy concentrate or intermediates.”

“APTis normally the last resort but scrap and concentrate are very tight and forsome buyers there is no other option,” a second supplier said.

“Iam not sure what can stop the run in the near term besides adequate volumes.Volume will continue to be short of demand through Q2,” a tungsten scrap buyersaid. “The scrap tightness will continue to be filled with APT and is going topush intermediates prices up even further.”

Tungstenconcentrate costs have also continued to rise on tightening supply, supportingintermediates prices, market sources said.

Manysmall-scale miners in China suspended operations last year on unfavorableprices that were very close to the cost of production. Sources said some majortungsten companies in China consume most of the concentrate they producethemselves, leaving only a small volume of material available to the widermarket.

Fastmarkets’weekly price assessment for tungsten concentrate, 65% WO3, in-whs China stoodat 90,000-92,000 yuan per tonne on February 10, unchanged from the previousweek’s assessment but up by almost 3% from the beginning of the year when themarket stood at 88,000-89,000 yuan per tonne. Producers in China had nomaterial to sell, having suspended operations due to an absence of workersahead of the Lunar New Year holiday between February 11 and 17. Cargo holderswere also unwilling to sell the raw material, market sources said.

Althoughtungsten concentrate prices have returned to levels which would make theresumption of mining viable, miners are reluctant to restart operations, marketsources added.

“Withdemand rising as supply remains restrained, we expect to see further gains intungsten prices in the coming weeks, with prices forecast to remain elevatedthrough the first quarter of 2021,” Fastmarkets analyst Amy Bennett said.