How to Get Started on Tungsten Investment

- April 23rd, 2019

Read on for a brief overview of the tungsten investment landscape, from supply and demand dynamics to how to invest.

The critical metal tungsten was discovered in Sweden in the 18th century, and since then has found myriad uses across diverse industries. About two-thirds of tungsten is used to make cemented carbide, while mill products and chemicals account for the rest.

While tungsten has many key uses, prices have been in the doldrums for the last several years. The low price of tungsten has led to reductions in output in some parts of the world.

In 2015, eight large Chinese tungsten producers announced plans to cut production, while Canada’s only tungsten mine was placed on care and maintenance. Despite those output cuts, world tungsten production came to 85,000 metric tons in 2019, up slightly from 81,100 metric tons in 2018.

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While the global coronavirus pandemic has stalled industrial activities and economic growth, there is hope for a turnaround in the tungsten market once the crisis is under control. Developments in infrastructure, 5G telecommunications and rail road construction projects are expected to boost demand for tungsten, especially in China. The Chinese government is projected to invest nearly US$5 trillion on more than 10,000 new infrastructure projects in 2020.

That optimism has left investors wondering whether tungsten investment is a good idea. Read on for a brief overview of tungsten supply and demand dynamics and how to begin investing.

Tungsten investment: Supply and demand

Tungsten is mined all over the world, though China is the world’s largest tungsten producer by far. In 2019, the country produced 70,000 metric tons of the metal, far ahead of the 4,800 metric tons produced in Vietnam, the world’s second largest tungsten producer. Russia, Austria and the United Kingdom also host significant tungsten resources.

Typically, tungsten deposits are found near orogenic belts, which are areas where tectonic plates have collided to form mountains. These belts run through East Asia, the Asiatic part of Russia, the east coast of Australia, the Alpine belt and the Rocky and Andes mountains.

One issue surrounding tungsten supply is the fact that the metal can be found in war-stricken countries like the Democratic Republic of Congo. For over a decade the extraction of mineral resources in these areas has been linked to conflict, human rights abuses and corruption.

For that reason, tungsten is known as a conflict mineral. To stem the production of conflict minerals, some government bodies have put rules in place to ensure that companies disclose where the metals they use come from. The EU has led the way after strengthening its conflict minerals rules, while in the US President Donald Trump has added tungsten to a list of 35 minerals deemed critical to US security.

In addition to being the world’s top tungsten producer, China is also the top tungsten consumer—giving the nation a major influence over tungsten prices.

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As mentioned, tungsten has a variety of uses correlated to the global economy. Tungsten carbide, alloy and chemicals are used in the construction, electronics, mining, automotive well as in oil, mineral exploration and mining.

Mill products also require tungsten. These products include tungsten rods, sheets, wires, light bulb filaments and electrical contacts; that said, tungsten’s use in light bulb filaments is declining with the introduction of new lighting technologies. The chemical industry also consumes tungsten — tungsten compounds are used as lubricants, catalysts, pigments and enamels, as well as in electronics and for other electrical applications.

Tungsten investment: How to invest

Some investors who believe tungsten prices will rise in 2020 and beyond may take the opportunity to enter the space in today’s low price environment. However, getting into the tungsten market can be a little difficult — as with many critical metals, getting direct exposure to tungsten is tricky as the metal does not trade on an exchange.

As a result, many market participants who are interested in tungsten investment turn to tungsten mining companies. Most tungsten-producing companies are located in China, and are either privately owned or listed only on Asian exchanges; however, tungsten investing options do exist elsewhere.

Investors interested in the tungsten market may want to check out our overview of the tungsten industry landscape in Spain, Portugal and the UK; click here to read more about some of the tungsten mining companies operating there. Information on tungsten companies located in Asia, North America, Africa and Australia can be found here.

This is an updated version of an article originally published by the Investing News Network in 2013.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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3 responses to “How to Get Started on Tungsten Investment

  1. I am Dr. Kevin Cole and I teach Economic Geology as well as Mineralogy at Grand Valley State University in Allendale MI.

    If possible I would like a sample of tungsten ore, a drill core and perhaps some concentrate.
    My students have never seen W concentrate or W minerals in a core and a limited variety of W minerals-Scheelite, Wolframite, –small and well used and is about it.
    I would appreciate some samples to use and show in class and use in student undergraduate research projects such a Spectra, Thin Section, XRD, and SEM-we have the equipment to do all make and work with these but not the samples.
    Something to have in our economic geology display case would be great, as well, our a display of “economic mineral” included cores and concentrates of copper, nickel, iron, tantalum, yttrium, titanium, uranium, lithium and many others but not Tungstan
    I know that this is asking a lot but I hope that you can make this happen or lead me in the right direction.

    My contact information is:

    Dr. Kevin Cole
    130a Padnos Hall of Science
    1 Campus Drive
    Allendale MI 49401
    Phone: 616-331-3791
    Email colek@gvsu.edu
    Again that you very much for your consideration of this request.
    Cheers, kcc

  2. Kevin

    Hello. I am closely associated with a tungsten miner here in Australia.
    I am wondering what you thoughts are on the current tungsten market supply/demand curve and what price expectations you might have for APT per mtu over the next 6 to 12 mths.
    My research has been telling me for some time that the US Dept of Defense stockpiles of tungsten have been running dangerously low and that the metal is now on their critical list.
    Is this the sort of area you do research in ?

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