RE: Roskill7 May 2019 11:59
Potential Tungsten Shortage Imminent: Roskill
Georgia Williams - May 6th, 2019
3d-printing-investing
Global mine production of the critical metal slipped in 2018 from 82,100 MT to 82,000 MT despite demand growing by 5 percent year-over-year.
Stricter environmental regulations in China coupled with depleting mine supply may create a tungsten deficit if new mines and projects aren’t brought online in the coming years, research firm Roskill says in a recent report.
Global mine production of the critical metal slipped in 2018 from 82,100 metric tons (MT) to 82,000 MT despite demand growing by 5 percent year-over-year.
Crackdowns on storage heaps in Jiangxi, Hunan and Fujian — China’s largest tungsten-producing regions — forced some producers offline until their projects were deemed compliant with government environmental regulations.
critical metals stock outlook report
Learn to profit from critical metals this year
We found stocks, market data, and important news and compiled it for you in a free report!
Give me my free report!
Ecological concerns aren’t the only issues plaguing Chinese tungsten producers. As mines mature, the quality of their output declines. If output is cut or reduced in China, there are few countries ready to ramp up production in order to offset a shortage.
“We expect Russian production to increase in the short term,” Jessica Roberts, copper and technology metals manager at Roskill, told the Investing News Network.
“Although, ultimately, many of the country’s established tungsten mines have the same issue as the older Chinese mines in that they face depleting ore grades and will likely come offline, meaning new mines will need to be developed over the next several years.”
Roberts noted that Vietnam, the second largest producer outside of China, also faces issues with its mine supply. In 2017, the country produced 6,600 MT of tungsten, but that number dropped in 2018 to 6,000 MT and is likely to not grow.
“Vietnam’s leading tungsten producer, Masan Resources, is already at full capacity and is increasingly buying in concentrate from third parties to enable it to raise output from its tungsten chemicals plant. All of this points towards new mines needing to be developed,” said Roberts.
While the uncertainty may not be beneficial for end users, it will undoubtedly be good news for the tungsten price, which hit a four year high in June 2018 of US$350 per MT unit as a result of Chinese smelters coming offline.
Following restarts in China, the price trended lower for the remainder of the year and hit US$275 in January, where it sits presently.
“The APT (ammonium paratungsten) price has been very stable in 2019 so far,” Roberts said. However, there are a number of factors that could drive the price higher for the rest of 2019.
Sign In
Follow the stocks
