Is the Halt in Tungsten Price Gains the Result of a Market-Policy Standoff?

Overview

TIP: Is the Halt in Tungsten Price Gains the Result of a Market-Policy Standoff? Or Is the Market Gathering Momentum for Another Rally?

Today’s tungsten market exhibits clear signs of stagnation at high levels and a tug-of-war between bulls and bears. As you have observed, the one-sided surge that began after the Chinese New Year showed its first signs of “consolidation” today. This is not due to a single factor, but rather the result of a high-stakes confrontation between the market’s inherent need for adjustment and external policy/resource dynamics.

Below is an in-depth analysis of today’s market conditions:

1. Core Tug-of-War: End-User Absorption Capacity vs. Resource Scarcity The market is currently stuck in a typical “standoff at high levels” phase:

Downstream (Downward Pressure): Tungsten concentrate prices recently broke through the 1.05 million yuan/metric ton threshold, pushing raw material cost pressures for mid-to-downstream smelters (APT) and end-user alloy and cutting tool manufacturers to their limit. Due to the lag in end-product price adjustments, the current situation where production immediately results in losses has forced buyers into a “wait-and-see mode,” causing a significant decline in trading activity.

Upstream (Supporting Factors): Despite instances of unsold lots (e.g., Luoyang Molybdenum’s auction saw only 1/7 of the lots sold), suppliers remain confident. The core rationale lies in the non-renewable nature of tungsten resources and the safe-haven demand driven by geopolitical tensions. While sellers have some profit-taking needs, they have no intention of engaging in large-scale price cuts or fire sales, creating a situation where they would “rather not sell than sell at a bargain price.”

2. Signals from the Scrap Market: Panic and Bargain Hunting Coexist

The sharp fluctuations in the scrap tungsten market often serve as a “leading indicator” for market trends. Profit-Taking: Due to excessive gains in the previous period, scrap tungsten recyclers have engaged in panic selling at current high price levels in an attempt to lock in profits.

Diverging Market Sentiment: Two opposing forces coexist in the market—some are scaling back purchases due to concerns about a correction, while others are using the correction as an opportunity to “drive down prices and accumulate inventory.” This divergence indicates that the market is undergoing a shakeout, with positions shifting from short-term speculators to long-term bulls.

3. Luoyang Molybdenum Auction: A “Cooling Agent” for Market Valuations

Yesterday’s auction results for Luoyang Molybdenum (starting price of 16,100 yuan/metric ton, with only 30 tons sold) serve as a significant barometer:

Transaction Price (1.046 million yuan/metric ton): Remains at a historical high, confirming the industry’s initial acceptance of prices exceeding one million yuan.

Widespread unsold lots: This sends a strong signal of “risk aversion.” It indicates that current prices have pushed against buyers’ psychological thresholds, and the market needs time to digest this price range.

4. Trend Analysis: Has the Market Peaked and Begun to Fall, or Is It Building Momentum?

Short-term Outlook: Wide-range fluctuations, seeking support Tungsten prices are expected to fluctuate between 1.03 million and 1.06 million yuan per metric ton in the short term. Due to the lack of further explosive positive catalysts, coupled with weak demand from end-users, the market may undergo a period of “price correction.” Medium-Term Outlook: Higher Probability of Building Momentum for an Uptrend Although the current gains have “reset” (sideways movement), the fundamentals underpinning this bull market remain unshaken:

Tight Supply: Declining ore grades and total production caps represent long-term positives.

Strategic Significance: Amid the volatile geopolitical landscape of 2026, tungsten—as a core raw material for defense and high-end manufacturing—has yet to fully realize its safe-haven value.

Cost Reassessment: Once downstream players successfully pass on costs to end-users through price adjustments, the market will initiate a new upward breakout.

Key Areas to Monitor:

APT Forward Contract Prices: Monitor forward contract quotes from major tungsten producers in late March, as these will determine the stability of the midstream market.

Inventory Flow: Observe whether panic sentiment in the scrap market is spreading to the raw ore market.

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