EU tungsten losses muted but eyes China for direction

Since the start of the second quarter albeit the European tungsten prices have declined at a slower speed than Chinese rates as weakening US-Sino trade relations, oversupply and weak demand weighed on worldwide markets.

Argus data show that the prices for APT (ammonium paratungstate) fell down by 9.3pc in Europe between January and 11 July, in comparison with the Chinese market, which erased almost a quarter of its value over the similar period. 

Since July last year, European APT prices have fallen by 29.4pc but Chinese rates have posted sharper falls, descending by 41.1pc.

Over the second quarter, the tungsten market of Europe was largely quiet, with many customers consuming material from their long-term supply contracts, which results in limited buying interest as well as a weak spot demand.

Globally the Tungsten markets globally were squeezed from oversupply and lack of requirement from the automotive, special alloys industries and cemented carbide resulting in decreasing costs. In China, the sharpest decline was noted, the top producer in the world. 

In reaction, many producers from China have agreed to cut production to ease supply pressures on prices, whereas predictions for heavy rainfall can squeeze supply in the latter half of the year. 

Moreover, this is not the first time that the worldwide tungsten market has faced a conglomeration of demand pressures and weak supply. 

In the early year 2016, tough market conditions underscored by decreasing prices, low demand and declining profit margins spurred Chinese producers to cut production for stabilizing rates.  

In the second half of 2016, this move resulted in a price recovery, a development that could replay in the year 2019 as the effect of the recent production cuts stem value losses in the near tenure.

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