Tungsten Outlook 2018: Will Supply Disruptions Continue?

This time last year, analysts believed tungsten could see a recovery in prices, and their predictions turned out to be correct.
The metal’s price rebounded in the first half of 2017 on the back of supply concerns and steady demand.
As the year comes to a close, the Investing News Network is looking back at the main trends in the tungsten space in 2017 and what’s ahead for prices in the new year.
Read on to learn what David Merriman, Roskill’s deputy manager – minor metals, and Jacques Brunelle, president and CEO of Knick Exploration (TSXV:KNX), had to say about the tungsten outlook for 2018.

Tungsten trends 2017: Supply disruptions hit

At the end of last year, research firm Roskill was expecting an overall tungsten price increase of around 20 percent for 2017; however, the metal’s actual increase far outpaced that estimation. 
“The intensity of the price reaction to supply disruptions in China has been more extreme than forecast, which has caused our price range to be recalculated,” Merriman said.
He added that this price spike made news headlines and encouraged many junior companies to restart or accelerate the development of tungsten deposits.
“In 2017, the tungsten market experienced an overall increase in prices for APT and tungsten concentrate, though prices have fallen back slightly in more recent months,” he explained.
Between January and September, APT prices in China increased by 64 percent, reaching a peak of $316 per mtu. Since then, Chinese APT prices have fallen back to $290 in October and are expected to remain at around $280 to $290 in Q4 2017.

For Merriman, the most important development this year has undoubtedly been the constraints caused by environmental inspections in China, which have disrupted production at mines and processing facilities.

Tungsten outlook 2018: Key factors to watch

According to Roskill, the tungsten supply/demand balance is set to remain tight for the rest of 2017, with the market ending the year balanced. But what’s the tungsten outlook for 2018?
“Despite increasing supply, continued demand in 2018 is forecast to form a supply deficit as operations in China continue to experience suspensions,” Merriman said. He also expects restricted output and supply from the rest of the world to remain flat.