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Potential Shortage of Tungsten Resources is Imminent

Views: 131     Author: Site Editor     Publish Time: 2019-05-14      Origin: Site

Research firm Roskilde recently reported that if no new mine projects are launched in the next few years, China's stricter environmental regulations and the depletion of mine supply may result in a lack of tungsten resources. Despite a 5% year-on-year increase in demand, global mine production of key metals fell from 82,100 tons to 82,000 tons in 2018.

Government environmental regulations have forced some producers in China's largest tungsten mines, Jiangxi, Hunan, and Fujian, to suspend production. In addition, as the mine matures, its products and grades are also declining. The report points out that if China cuts production, there are few The country can prepare to increase production to make up for the shortage.

Roskilde manager Jessica Roberts said that Russia's production is expected to increase in the short term, but many of the country's established tungsten mines have the same problems as China's old mines, as well as the depletion of ore grades and may stop production. This means that new mines need to be developed in the next few years.

Vietnam is the second largest producer outside China and faces mine supply problems. In 2017, the country produced 6,600 tons of tungsten, but this number dropped to 6,000 tons in 2018 and may not grow. Roberts said that Masan Resources, Vietnam's leading tungsten producer, is already producing at full capacity and is increasingly buying concentrates from third parties to increase production at its tungsten plant. All of this points to the need to develop new tungsten mines.

Although this uncertainty may be unfavorable to the end user, it is undoubtedly good news for tungsten prices. The report shows that due to the suspension of production in China's smelters, tungsten prices hit a four-year high of $350/ton in June 2018. . With the resumption of production in China, the price has dropped again and reached US$275 in January, which is currently at this level.

“So far, the price of APT (ammonium paratungstate) has been very stable since 2019,” Roberts said. There are many factors that could drive higher prices for the rest of 2019. Factors to watch include the development of the La Parrilla and Barruecopardo tungsten projects. Whether the speed, pan-Asian APT inventory was sold in 2019, and the negotiation resolution of Sino-US trade.

In addition, Roberts pointed out that the tungsten demand base in the tool field is large and stable, mainly for cemented carbide tools, and other tool materials, such as high-speed steel directly related to manufacturing activities. Among them, automotive parts processing is a large market for tungsten-containing tools. Tungsten applications in the automotive and aerospace sectors have grown over the past few years and are expected to continue to increase, which also adds to the traditional use of metals.

Roberts said that the conditions for meeting the moderate increase in APT prices in 2019 include: Spain's new mines are on schedule; China and the United States have achieved positive results; APT prices have risen slightly from the end of the second quarter to the third quarter, and then affected by seasonal factors in the fourth The quarter continued to fall.

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