| Since the early 1980's tungsten prices remained around $2.50/lb, but in early 1995 prices hit $15/lb and have remained in the $12.50/lb range for recent months. Industry practice is to quote tungsten price on an STU (short ton unit) basis. One STU is equal to 20lbs of tungsten. For simplicity, we have prices displayed in both ways to the right.
Strong global demand and declining mined tungsten output from China are the two primary reasons cited for the recent resurgence for tungsten pricing. Tungsten's high melting point and resistance to extreme temperatures make it difficult to substitute away from in terms of usage. In short, industry pundits cite constructive pricing in the years ahead, owing to continued strong global tungsten demand coupled with limited new supply expected to come on to the market.
The current global consumption for Tungsten is an estimated 80,000 metric tons per year, with 60,000 tons coming from mines and the balance from recycled material. China is thought to be the largest consumer with annual consumption in the order of 24,000 tons of tungsten per year. Industry experts believe that annual growth for global tungsten demand has been 8% to 10%. Such growth would translate into 5,000 tons of incremental tungsten needed to satisfy global tungsten demand each year.
Exports From China Have Been Declining
Historically, roughly 70% of the worlds mined tungsten production has come from China. However, the following factors are attributed to the declining trend for tungsten exports from China:
- Smaller tungsten mines have been depleted of reserves
- Export rebates have been close to eliminated
- Internal demand in China has been robust in recent years
Tungsten Consumption
Tungsten, the metal with the second highest melting point and second hardest in terms of malleability after diamonds, many reckon mitigates the risk of substitution away from the metal. Roughly 50% of its usage is associated with tools and machinery, 25% light filaments, and 10% for artillery. The United States, Europe, China, and Japan account for the majority of global tungsten consumption.
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Current Tungsten Price
Week of February 22, 2010
$10.00/lb |
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