China Tungsten Industry Association (CTIA) is appealing to the government to establish both resource reserves and commercial reserves of tungsten.

China's tungsten industry is undergoing a severe situation due to weakening demand, decreasing export and dropping prices, said a CTIA source.

In the first three quarters of this year, China exported 20,000 tons of tungsten products, down 7.4 percent on year, with the exported value down 9.1 percent to 690 million US dollars.

Among the main tungsten products, tungsten concentrate, secondary ammonium tungsten and ferrotungsten saw their price fall 35 percent, 32 percent and 18 percent respectively from a year earlier.

In the first half of this year, profits of major tungsten mining and smelting companies in China dropped by 30.4 percent and 150.7 percent respectively on year. Since October, tungsten concentrate price has slumped below 60,000 yuan per ton, down 55.6 percent from 2006's high.

Currently, a number of Chinese tungsten  companies have ceased production or shut down half of the production lines.

CTIA also calls for tungsten companies to improve investing efficiency, and to work together and promote industry optimization and upgrading.