It would appear that Tungsten, despite a tight supply market and the lack of any new facilities coming on stream is not immune to the general downturn and rather than prices continuing to rise as expected earlier this year they have in fact drifted off slightly from the March highs. The decision of the Chinese government to increase export taxes on tungsten products and reduce the export quotas for tungsten and APT (starter stock for tungsten production) at the beginning of this year initially had a bullish effect on the market but as the earlier trend of rising imports and reducing exports flattened out and global demand for machine tools and drill bits slowed, prices for both APT and Ferro Tungsten eased.
The one new mine expected to come back on stream this year, Golden Predator, in Nevada would have been the only US mine in operation but the credit crunch has made raising the funding difficult and plans have been postponed. North American production remains solely north of the border for now and even there the New Brunswick project Sisson Brook must be in question in the current economic situation. The delay is that Golden Predator is unlikely to materially affect the market until there is a significant pick up in demand. With China, by far the largest consumer and producer, which is experiencing a slow down in growth, the price for tungsten is unlikely to see a return to the highs of earlier this year. With tungsten and steel prices both easing, buyers should track the raw material costs in the months ahead and seek tool steel price reductions. Imports play a significant role in the US market and with the dollar retaining much of its summer gains we can expect this to have a downward effect on tool steel prices as stocks work their way through.