European Ferro-Tungsten Prices Decline Amid Summer Demand Slowdown

After experiencing a significant spike in the year's first half, European ferro-tungsten prices have begun to decline due to a typical summer demand slowdown. The earlier surge was driven by concerns over a global concentrate shortage and increased replacement material from Asia due to higher demand.

Summer Slowdown

The easing of prices started at the end of June, paralleling the trend in the Asian market where lower feedstock costs and stagnant steelmaker demand led to a decline. Market participants noted ample material availability, with many sellers holding onto their inventories in anticipation of a post-summer price rebound. However, the outlook now suggests a gradual easing of prices for the remainder of the year. This is due to stockholders likely needing to offload inventories at lower rates amidst unchanged end-user demand since the spring surge.

Despite the downtrend, prices remain historically high for this time of year, averaging $42.50/kg in July, the highest for the month in over a decade.

In the first half of this year, European ferro-tungsten prices rose by 15.6%, influenced by higher prices in China and speculation about supply constraints. January to June prices were 4.5% higher than the same period last year, averaging $40.18/kg. A sudden spike to $42/kg in April was driven by fears of reduced Chinese exports due to domestic shortages. This led market participants to secure material rapidly, pushing prices to a peak of $44.75/kg in late May.

China's Role

China, the world's largest ferro-tungsten supplier, saw its exports more than double in the first three months of this year compared to last year, driven by strong domestic demand amid tight supplies. Chinese prices for 75% ferro-tungsten peaked at 239,000-241,000 yuan/t ($32,982-33,258/t) in May, surpassing previous records from June 2011. These high concentrate costs led steelmakers to conserve inventories, limiting restocking efforts due to stagnant downstream demand.

While a short-term price increase was expected due to tight concentrates in China, long-term prices are projected to fall as supply conditions normalize. European prices, although declining, are still elevated compared to previous summers, reflecting the market's volatility and ongoing adjustments to global supply and demand dynamics.