en.Wedoany.com Reported - China's tungsten prices entered a phased bottoming and recovery range in late July. After a sustained deep correction earlier, low-priced supplies became scarce in the market. Upstream mines and holding traders withheld sales and showed strong price-supporting intentions, with the center of gravity for spot transactions steadily moving upward. However, affected by the traditional off-season in the industry, downstream end-user demand has not yet significantly recovered, resulting in a structural divergence characterized by upstream raw material price support and rebound, coupled with weak downstream demand.

A certain tungsten enterprise lowered its long-term contract procurement prices for the second half of July. The latest quotes from a tungsten enterprise in Chongyi are as follows: 55% black tungsten concentrate at 411,000 yuan per metric ton unit, down 37,000 yuan per metric ton unit from the previous round; 55% white tungsten concentrate at 410,000 yuan per metric ton unit, down 37,000 yuan per metric ton unit from the previous round; ammonium paratungstate (national standard zero grade) at 605,000 yuan per ton, down 55,000 yuan per ton from the previous round.

In this market cycle, the average price of black tungsten concentrate weakened continuously after rebounding to a previous high of 527,500 yuan per metric ton unit in early to mid-June. The core drag factor was the persistently weak downstream end-user demand, coupled with the digestion cycle of raw material inventories following earlier concentrated stockpiling by enterprises, which significantly weakened market price support. Tungsten prices began a downward adjustment from June 17. Compared to the average price of 527,500 yuan per metric ton unit on June 16, the average price of 402,500 yuan per metric ton unit on July 17 represented a decline of 125,000 yuan per metric ton unit, or 23.7%, within just over a month.

After the rapid decline in tungsten prices, phased bottom support gradually emerged in the market. Tightening upstream supplies and rising sentiment to withhold sales and support prices drove tungsten prices to stop falling and rebound for two consecutive days. According to SMM quotes, the price of black tungsten concentrate (≥65%) on July 21 ranged from 410,000 to 415,000 yuan per metric ton unit, with an average of 412,500 yuan per metric ton unit, up 1.23% from the previous trading day. Currently, low-priced supplies are scarce in the market, and holders have stopped selling at low prices. Coupled with the fact that the long-term contract procurement prices of leading tungsten enterprises are higher than spot transaction prices, market confidence has been effectively boosted, driving spot transaction prices to converge with long-term contract prices.

In the short term, supported by tightening raw material supplies and the price-supporting sentiment of holders, the tungsten market in late July will mainly experience a slight rebound and volatile bottoming, without conditions for a significant reversal. A substantial recovery and improvement in the market will depend on the arrival of the traditional downstream consumption peak season from August to September, relying on the recovery of end-user orders and the release of concentrated restocking demand. Currently, the industry chain has a relatively consistent expectation of a recovery during the peak season, and some enterprises may gradually carry out preemptive stockpiling operations at low prices, which is expected to drive marginal improvements in the tungsten market.

At this stage, the tungsten market is at a critical juncture of stopping declines and bottoming out, with the recovery concentrated in the upstream raw material segment. The downstream tungsten powder and cemented carbide sectors are still affected by the traditional consumption off-season, with stable end-user operations and a lack of new orders. Enterprises adopt a just-in-time replenishment strategy based on demand, with no large-scale stockpiling activities. However, there is a broad consensus in the industry chain regarding a market recovery after August, and preemptive low-price stockpiling activities are gradually increasing, which is expected to drive the industry chain upward ahead of time. Affected by the summer holidays, overseas markets are seeing light trading and high price volatility, with a very low risk of a sharp decline. The divergence between domestic and foreign markets is expected to persist. Going forward, four key variables require close attention: the pace of supply release from Chinese mines and the price-supporting sentiment of holders; the recovery of downstream cemented carbide end-user operations and the intensity of concentrated restocking; the market guidance role of APT long-term contract quotes; and the circulation volume of scrap tungsten and the volume of downstream recycled raw material procurement.