Tungsten Price Affecting Factors
Under the conditions of depressed manufacturing industry, tungsten market also enters normalization ordinary. Tungsten raw material capacity stays in the constant high level. With the application of tungsten waste, end market lowers its dependency on tungsten raw material. Cost of heavy mining is increasing, it results in the irreconcilable conflicts of tungsten market.
Tungsten price affecting factors are raw material price, production cost, labor cost, energy cost, processing cost, environmental cost, etc.
1.Tungsten raw material producing capacity is relatively at high level, supply of tungsten concentrate and APT overdue actually demanding which results in the unbalance of supply-demand relationship, it affects tungsten raw material price directly.
2. Tungsten mine cost directly affects price, heavy mining based on state-owned enterprise has high cost; medium and small mine is of lower cost. So tungsten concentrate of low price is sometimes active in the market.
3. Enterprise property of tungsten mine has effects on price as well. More than 50% tungsten concentrate originated from state enterprise tungsten mine. State-owned enterprise actively supports market place. When the price is too low, they will refuse to sell the product to protect rare metal source.
4. Capacity of tungsten concentrate is relatively centralized, more than 55% is from eight major tungsten enterprises. Since last year, three conference of the enterprises also save the market in a certain degree.
5. Through out a year, tungsten market will go through the spring supply and summer break. After spring festival, there is once confused of market, most tungsten raw material companies are reluctant to sell and hold on to see the trend of market. It results in the market’s short supply and increases of price. Summer break is often in July and August, most European countries takes summer break and stops production. The demanding is rare during this period.
6. China Tungsten Industry Association and Ganzhou Tungsten Industry Association has effects on tungsten market as well. When the market is unstable, they will preserve interests of members.
7. Market guidance price of Ganzhou Tungsten Industry Association and China Minmetals Group publicized every month have effect on market price.
8. State Reserve Bureau purchasing and storage of tungsten concentrate directly affects price. Since 2013, purchasing and storage for 5 times of tungsten concentrate, 3 of them have succeeded and affects tungsten raw material price.
9. Fanya Metal Exchange purchased a lot of APT since 2014, over 30000 tons of APT is purchased in 2014. But the price keeps sliding due to the increase of capacity. The stop of purchasing and returned of goods in the market in the beginning of 2015 causes tungsten price slumps in 2015. There is still 29651 tons of APT is stocked in Fanya, the potential effect can not be ignored.
10. Tungsten concentrate trade situation. When price difference is more than profit, capita flows into tungsten concentrate market. The trade operation will also affect market. When price of tungsten concentrate is less than manufacturing cost, traders purchase a lot as inventory then sell it at high price. The sliding of price in June, 2016 is the classical operation method of traders.
Besides the above factors, environmental protecting policy, resource tax reform, weather condition in main factory, main stream big enterprises shut down, etc. are all the reasons that will affect price.
As tungsten parts, tungsten raw material has been a big part of the cost consideration. But for finished products, most consideration will go to processing cost, including the tolerances, surface condition, weight control, or others besides raw materials. If a part is different to be processed after analyzing, the processing cost of this part will cover raw material price.
Above considerations are some factors that affecting the final products cost, and if there is a detail part, the analyzing will be much detail.
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