The Main Driving Forces for Tungsten Demand in the next Decade

China's large-scale environmental rectification measures led to a rise in tungsten prices in 2017 and early 2018. As many tungsten mining companies were forced to stop production, European FOB-APT prices reached a peak of US $ 352 per metric ton in June 2018. Production of these businesses resumed at the end of 2018, but demand from the Chinese automotive industry began to stagnate, causing tungsten prices to plummet in 2019, reaching a valley value of US $ 200 / metric ton in September. The pan-Asian APT inventory was successfully captured by Luoyang Molybdenum in September 2019, which prevented tungsten prices from declining, and the industry sentiment was significantly improved, stimulating European APT prices to jump to US $ 240 per metric ton.

As of mid-April 2020, APT prices have remained stable, and the impact of the new coronary pneumonia epidemic (COVID-19) supply chain interruption has little effect on spot prices. However, as Europe, North America and other parts of the world entered a blockade period, various restrictions were imposed on enterprises to prevent the spread of the epidemic. The consumption of raw materials in domestic APT smelters slowed down, which affected the price of tungsten concentrate. At the same time, however, China's industry seems to be returning to normal ...

In its latest report, Roskill, an international research institute for metals and mineral products, predicts that the demand for tungsten will grow at a rate of more than 1% per year between 2019 and 2029, driven by increased consumption of industries such as cemented carbide and steel.

Roskill estimates that the cemented carbide industry will account for more than 55% of total tungsten consumption in 2019. Due to the growing demand in China and countries with less mature tungsten markets (such as South Korea), the annual growth rate of tungsten demand is expected to be 1.5% in the next decade. Due to the continued growth of the electric vehicle (EV) market, the growth of cemented carbide will be relatively stable, with about one-third of tungsten consumed in the automotive industry by 2019. Due to the reduction in the number of parts required for electric vehicles, the utilization rate of cemented carbide tools in production has also been greatly reduced. However, this trend will be offset by the greater demand for cemented carbide in other parts such as aerospace, navigation and mining. .

In the next ten years, the annual growth rate of tungsten demand in the steel and alloy industries will be the highest and is expected to increase by 2.5%. In 2019, the steel and alloy industries accounted for less than a quarter of total tungsten consumption, and by 2029, this share will rise further. Historically, the main source of tungsten consumption in the steel and alloy markets is tool steel (including high-speed steel), and it is expected that it will continue to be the main consumption area of tungsten in the future. However, the development of aerospace demand may be beneficial to tungsten-containing superalloys and high specific gravity tungsten alloys. It is expected that by 2029, the annual growth rate of tungsten consumption in superalloys will reach 8%.

Chemical applications may become another major growth area for tungsten demand in the next decade. The catalyst and semiconductor markets are the two largest markets for tungsten chemicals in 2019, and may become the main driver of the tungsten industry in 2029, which is related to environmental regulations and electronic products.

In the past ten years, the supply of raw tungsten has fallen behind the demand to some extent, which has resulted in a reduction of a large amount of tungsten stocks and a large amount of auxiliary tungsten to meet the demand. China is a major supplier of tungsten, accounting for more than 80% in 2019. However, many large state-owned mines are facing the problem of depletion of ore taste, which is likely to lead to a decline in the output of existing businesses in the next ten years. Roskill predicts that by 2029, China's tungsten market share will drop to less than 72%, unless new businesses are launched to compensate for the decline caused by asset depletion.

It is reported that two large tungsten mines in Spain went online in 2019, including La Parrilla (controlled by W Resources) and Barruecopardo (controlled by Saloro). Both parties hope to increase production in the next few years, and output is expected to peak in the mid-2020s. The production plans of the two companies will contribute more than 3,000 tons / year of tungsten production capacity. Three other projects in Spain are in the financing and licensing stage.

Australia currently has two small-scale production operations, the most recent one being launched in 2019. By the mid-2020s, five other projects currently in the financing and licensing stage may join the ranks of global mine producers, with annual production capacity exceeding 5,000 tons.

Other large-scale advanced projects expected to be launched in the near future include Sangdong (3600 tons / year tungsten production capacity) in South Korea under development by Almonty Industries and Sisson (5600 tons / year) production capacity in Canada owned by Northcliff Resources.