Friday, June 5, 2009

Tungsten tags avoid storm, hold steady

New York Tungsten prices in the United States have surprisingly held steady over the past month and mostly avoided the sharp ups and down that have rocked other materials like vanadium and molybdenum, according to market sources.

Most traders said that ammonium paratungstate (APT) is still hovering around $160 per short ton unit (stu), unchanged from last month, although one trader said his company was getting a higher price but declined to give an exact figure.

"Fortunately we're busy," the trader said, "and tungsten prices amazingly are holding. Demand might not be what it was, but it's better than it has been."

Another trader, who put APT at around $160 per stu, said demand for tungsten was turning around as oil prices edged upward and approached $70 a barrel. Tungsten is used in drill bits, the trader noted, and more drills likely will be sold as oil companies increase exploration and production on the back of higher prices.

Tungsten also is used to make cutting tools for the automotive industry, the trader added, and once those companies receive bail-out money from the government "they'll want to start back up and get going again."

A third trader said he'd seen tungsten prices firm up over the past two to three months, although current prices are well below the $190 to $210 per stu reported in late March. "Tungsten has held up better than a lot of other metals," he said. "The price last year was less inflated than prices for vanadium and moly. The price for tungsten didn't bubble as much and so the adjustment wasn't as severe."

The trader was confident that tungsten demand would improve over the summer, although he acknowledged that a real recovery might not take hold until the fall.

Much like what happened among molybdenum miners, Chinese tungsten producers have closed many of their least-efficient mines and turned to importing concentrate to meet internal demand, which has provided a bit of a boost to tungsten sellers outside Asia, a trader said.

The trader couldn't say if rising demand from China was sustainable or just a momentary blip, "but hope springs eternal."

According to figures from the China Mining Association, Chinese exports of tungsten totaled 3,397 tons valued at more than $84.8 million in the first three months of this year. The volume dropped 14.6 percent from the same period last year, while the value was 25.7 percent lower. China produced almost 3.93 million tons of ferroalloys in the first quarter, a 7.1-percent decline from a year earlier.

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