Chinese Tantalum Smelters Push Back Against Rising Tantalite Feedstock Prices

Tantalum

Supply tightness and weak US demand cap upside despite recent price gains

Chinese tantalum smelters are resisting recent increases in tantalite feedstock prices, citing tight profit margins and weak downstream demand. Although prices for tantalite have been climbing since late January, smelters are holding firm due to ongoing cost pressures and limited pricing power.

For now, this standoff is unlikely to disrupt near-term production. Most Chinese smelters still maintain adequate inventories of tantalite and are operating steadily. However, rising feedstock costs are squeezing margins, especially since smelters have been unable to lift their offers for key intermediates like potassium fluotantalate and tantalum pentoxide.

African supply disruptions and speculative trading drive short-term volatility

Supply disruptions in the Democratic Republic of Congo (DRC) have fueled short-term price speculation in the market. Armed conflict in the region has disrupted mining operations and reduced material flow, prompting traders to raise spot offers.

However, other African suppliers—including those outside Rwanda and the DRC—are stepping in to meet demand. Market participants expect that increasing alternative supply and cautious downstream buying will limit any significant upside in tantalite prices.

US tariffs weaken Chinese exports, limit demand outlook

China’s tantalum export outlook has deteriorated due to weakened demand from its largest buyer—the United States. Since September 2024, US importers have scaled back purchases following the implementation of a 25% tariff on unwrought tantalum exports from China.

This policy shift, introduced under former President Joe Biden’s administration, has significantly reduced orders for key Chinese producers. Currently, the US accounts for approximately 50% of China’s tantalum exports, making this a critical concern for the sector.

Without a reversal in trade policy or a pickup in global demand, Chinese smelters are expected to tread cautiously in their procurement strategies throughout 2025.