Tungsten Market Faces Disruptions as China Imposes Export Controls on APT

Ammonium Paratungstate

The recent announcement by China to place ammonium para-tungstate (APT) and tungsten concentrate under strict export controls has sparked significant price increases in the European market. As buyers scramble to secure material, European consumers are seeking to build "safety stocks" to ensure supply continuity amid the uncertainty surrounding these export restrictions.

China's Export Controls Create Supply Chain Concerns

China's decision to add APT and tungsten concentrate to its list of dual-use items has left global tungsten buyers on edge. With this new regulation, Chinese suppliers have hesitated to provide fresh price quotes, waiting for clearer instructions and permits from the Chinese government. This delay in pricing is expected to persist for around 45 days, further exacerbating concerns in the tungsten market.

As the export controls limit available material, European and Japanese markets are expected to feel the greatest impact. While U.S. buyers primarily rely on tungsten scrap for their needs, prices for this resource are also expected to rise due to the overall global tightness in tungsten supply. European buyers are particularly active in sourcing material outside of China, not due to increased demand, but to secure stock ahead of anticipated supply disruptions.

Verification of End-Use Creates Delays and Bottlenecks

The new export regulations require Chinese exporters to notify authorities of the final end-user and application of the tungsten products, adding another layer of complexity to the supply chain. The verification process, which ensures that the material isn't being used for military purposes, is expected to create significant delays. With approximately 70% of Japan's tungsten imports coming from China, these controls are likely to disrupt the Japanese market the most. The European Union also faces similar challenges, with imports from China making up a substantial portion of its tungstate needs.

Impact on Global Markets and Price Forecasts

While the Chinese export restrictions are expected to drive prices up, particularly in Europe and Japan, the full impact remains uncertain. Tungsten is crucial for a variety of industrial applications, with APT serving as the intermediate material for producing tungsten oxides and powders. However, with limited available stock and supply chain disruptions, some market participants worry that the price increases could become more drastic.

The situation has drawn comparisons to China's antimony export delays, which have significantly disrupted the European market and caused prices to surge. The tungsten market may face similar challenges as supply becomes even more constrained, with both APT and tungsten concentrate prices continuing to climb.

Conclusion: A Fragile Market with Rising Prices

As the global tungsten market grapples with China's export controls, prices for APT and tungsten concentrates are likely to remain volatile. The duration and enforcement of these new controls will determine the severity of the price hikes, and the market will need time to adjust to the changing dynamics. With Europe and Japan facing the most significant challenges, the tungsten supply chain will need to adapt to avoid further disruption.