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Key takeaways:
On one hand, prices for ammonium paratungstate (APT) on both an FOB China and CIF Rotterdam/Baltimore basis – that is, those reflecting export markets – remain closely linked.
But on the other hand, in recent weeks, sources across markets globally have reported that it has become apparent that domestic Chinese APT prices in particular have begun to decouple from export prices.
In the years that preceded the implementation of Chinese export controls on various forms of tungsten coming from the country, including APT, shifts in Chinese domestic prices would, sooner or later, be reflected in overseas markets – at least to some extent.
And in the immediate aftermath of the implementation of those export controls, domestic Chinese and export prices for APT were similarly supported by high input costs, keeping them more closely linked to one another.
But that link was now weakening. In recent months, tungsten concentrate prices have come down significantly in China, reducing input costs and contributing to decreases in domestic APT prices – but not in the export market for APT, where access to supply remained a critical driver.
For example, Fastmarkets’ price assessment for tungsten concentrate 65% WO3, in-whs China, was 500,000-525,000 yuan ($73,584-77,263) per tonne on June 24.
The was a decrease week on week from 510,000-550,000 yuan per tonne, following a rebound earlier in June. But it was still down by some 50% from an all-time high of 1 million-1.05 million yuan per tonne, set on March 11.
On the other hand, Fastmarkets’ price assessment for tungsten concentrate, basis 50-70% WO3, spot price, cif global, has been $2,500-2,800 per mtu WO3 since May 29. The price began the year at $750-850 per mtu WO3 and had seen an almost unbroken run of increases over 2026 so far.
“The arbitrage mechanism that once linked domestic Chinese prices to international markets is becoming less effective,” a trader told Fastmarkets.
The export licensing requirements that led to restricted availability (in seaborne markets for APT in particular) have limited the arbitrage opportunities, creating something of a rupture in price relationships.
The result has been a significant divergence between prices domestically in China and those overseas, trade sources have told Fastmarkets.
“The mid and downstream customers [outside China] are desperate for material and are unable to obtain it, and are thus paying higher prices at the moment. This is the reason for the high Western market prices,” a tungsten industry participant told Fastmarkets.
“Recently – China has reduced its raw material purchases, and prices there have decreased significantly. More recently, we [have seen] slight decreases in the Western [prices] and increases in China. [I think] this disparity cannot last in the long term, but will be there for a period of time.”
The shift has widely been attributed to China’s expansion of its regulatory frameworks governing the supply of strategic materials, and especially the implementation of the export controls.
“The tungsten trade has always been heavily regulated,” Aditya Aggarwal, deputy chief executive officer of Masan High-Tech Materials, told Fastmarkets, “but the situation has become more pronounced because China, the largest producer, has introduced additional controls. It is not a ban, but these measures inevitably create different pricing dynamics across markets, which is what we are witnessing today.”
According to numerous market participants, Chinese domestic APT prices softened considerably over recent months, with trade sources suggesting that prices dropped to about $1,200-1,300 per mtu WO3 during June, and some indications that they had come down by $1,000 per mtu WO3 or more from recent highs.
On the other hand, outside China, APT prices have remained elevated – and well above domestic levels – supported by constrained availability, linked especially to more limited access to material.
“I would say the correlation between China and non-China prices has broken down materially,” Aggarwal said. “I do not see any strong logical or fundamental reason why the two should continue to move in tandem, especially given that the tungsten demand-supply dynamics have changed materially in the past 15 months.”
To some extent, this is not new – given China’s dominance in terms of production, there must naturally be some difference in dynamics in the domestic versus the export market.
“There has always been a structural deficit in non-China markets, and that should result in different pricing dynamics between China and non-China markets for concentrates and tungsten intermediates,” Aggarwal said.
The difference now is the access to material, especially intermediates.
“Tungsten units are no longer freely coming from China in the form of intermediates, which historically helped to supply non-China powder production,” Aggarwal said. “At the same time, growing demand – from strategic sectors including defense, AI and strategic stockpiling initiatives being undertaken by different governments globally – are further widening the supply deficit and supporting tungsten prices.”
For example, in terms of export prices, Fastmarkets’ weekly price assessment for tungsten APT 88.5% WO3 min, fob main ports China, was $2,600-3,250 per mtu WO3 on June 24, up by 0.86% week on week from $2,600-3,200 per mtu WO3 – and still well above historical norms.
Year on year, the price has come up by some 631%, from $390-410 per mtu WO3 on June 25, 2025.
Similarly, Fastmarkets’ weekly price assessment for tungsten APT 88.5% WO3 min, cif Rotterdam and Baltimore, duty-free, was $2,900-3,210 per mtu WO3 on June 19, up by 0.49% week on week from $2,900-3,180 per mtu WO3 and up by 575% year on year from $430-475 per mtu WO3 on June 20, 2025.
“It’s quite hard for international buyers to secure raw materials nowadays, and they know it. For exporters, it takes months to get a license and the cash flow is very slow, so you cannot just lump these two markets together,” a sell-side source said.
This meat thats prices have begun to show a much stronger split along geographical lines, at least between China and Western markets, according to trade sources.
“I think the assumption of price convergence is more of a theoretical concept that depends on a truly free global market. Tungsten is a critical material, not only for everyday industrial use but also for strategic applications such as national security,” Aggarwal said. “Given its strategic importance, some level of government intervention is inevitable, and the full price convergence does not seem particularly practical.”
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Within China, market dynamics have been driven in recent weeks by higher inventory, weaker sentiment and reduced liquidity, it has been suggested.
Meanwhile, overseas, prices have been shaped more by access to supply, with relatively scarce non-China alternatives for APT supply especially, and with buyers said to be willing to pay more for APT in order to secure units, as well as to mitigate risks associated with longer or uncertain delivery lead times.
This shift has effectively created a transmission barrier, where factors affecting markets within China specifically have not passed into the export market, and vice versa.
“You cannot move material as freely as before,” a China-based trader said. “That means price signals in China do not fully transmit overseas. We’re starting to see two separate markets.”
The effects may also have begun to extend beyond pricing and into industrial decision-making – for example, in terms of the approach to procurement.
“We are trying to fix the procurement price back-to-back and we are changing payment terms to cover our financial risk,” a second tungsten industry participant told Fastmarkets.
And the shift in dynamics since 2025 has led to changes not only in how people buy – but in what they buy.
Historically, Aggarwal said, industry gradually shifted from high-speed steel tools to cemented tungsten carbide tools, which have a higher durability and a longer life, meaning that the overall cost of ownership of tungsten carbide tools would generally be lower during the life of the tool compared with high speed steel.
“While high-speed steel contains relatively modest amounts of tungsten, cemented carbide tools are predominantly tungsten-bearing materials, making them significantly more tungsten-intensive,” he said. “Tungsten carbide tools have a higher durability and a longer life. So, overall, the cost of ownership of tungsten carbide tools is generally lower during the life of the tool compared with high-speed steel.”
But now the trend has begun to invert – at least, in some parts of the market.
“At today’s prices, the reverse trend can be seen in some pockets where people will be starting to use high speed steel tools rather than tungsten carbide for a while. In the long run, it will not be cost effective but, at least for the short run, people can defer some consumption,” Aggarwal said.
The effect of rising tungsten costs can also be seen in drilling operations in the oilfield services sector, for example, where tungsten is a key input for drill bits.
For example, Patterson-UTI, a major oilfield services company in North America, has said that higher tungsten costs have begun to affect capital expenditure directly.
In its financial report for the three months ended March 31, the company showed an 8.4% increase in capital expenditure quarter on quarter, and specifically flagged higher raw material costs, particularly tungsten powder used in certain matrix bit applications, as a reason.
At the same time, sourcing has become more challenging in general, inside or outside China, market participants have told Fastmarkets.
In terms of passing on costs further down the supply chain, furthermore, this was “not always an easy task” in the case of medium and long-term supply contracts, according to the first tungsten industry participant.
“Customers’ willingness to pay depends largely on the competitive landscape in the relevant product sector, the strategic importance of the tungsten product for the specific application, and whether the product can be substituted,” he said. “It is more important than ever to make sure our customers understand the full supply chain consequences.”
Throughout supply chains, regulatory measures in China have reshaped how tungsten supply is accessed globally, with reports emerging of various efforts to mitigate this effect, from moving up the supply to concentrates, to considering alternative material such as ammonium metatungstate, and even moving away from tungsten.
“I think we have already crossed a ‘red line’ where we will see this happen over the next year. Once replaced, it may harm the tungsten market in the long run because it may not come back. And new developments may start without tungsten from the very beginning,” the second tungsten industry participant said.
“Customers are working on substitutions of tungsten and on reductions of tungsten proportions in their products. It could reduce total worldwide tungsten demand,” a third tungsten industry participant added.
But according to Aggarwal, because of tungsten’s unique physical and chemical properties, it is unlikely that there will be long-term demand erosion.
“I think people are trying to prolong usage, rather than real destruction of demand,” he said. “The way I see it, demand may shift between different stages of the value chain or between different tungsten products. But I do not believe tungsten demand can be permanently destroyed.”
In the majority of cases, the first tungsten industry participant added, tungsten is difficult or even almost impossible to replace in its applications as a metallic product or as tungsten carbide in hard metal tools.
“We believe in tungsten prices that contribute to a reliable, sustainable supply throughout the entire value chain. Prices that are stable enough to secure investments in mining projects, yet reasonable enough to avoid unnecessary incentives for substitution in end-use applications,” he said.
In some ways, the more things change, the more they stay the same.
“For decades, we have laid the foundation for a tungsten supply chain independent of China – for all products we sell outside of China – and since then, our tungsten supply chain in the Western world is China-free,” the first tungsten industry participant said.
“As our supply sources and strategy have not changed, our production costs to take the raw material downstream have not fundamentally changed. We also built in flexibility to utilize many different types of raw material, including different grades and impurities,” he added.
Overall, meanwhile, the fragmentation of tungsten pricing between China and elsewhere may be indicative of a broader transformation in how it is traded and valued, alongside intensifying focus on its importance as a geopolitical chess piece.
With the link between domestic and export prices weakened, price dynamics have begun to show more regionalization, with greater variation in the drivers shaping markets inside and outside China.
“Historically, the tungsten market has been more supply-side-driven than demand-driven, a trend that is expected to persist in the coming years amid supply security concerns and tightening trade policy restrictions,” Fastmarkets analyst Emre Uzun said. “That said, elevated prices, together with government policies across regions to secure non-Chinese supply, are supporting investment in new projects, which is likely to increase ex-China supply in the next decade.”
As a result, Uzun said, China’s share of global primary tungsten supply is expected to ease during this period, with domestic output remaining relatively flat, while other regions ramp-up.
“In this context,” he said, “rising demand from strategic sectors such as defense, alongside a heightened focus on securing critical mineral supply chains in the Western world, should support the project pipeline and improve the likelihood of these projects reaching production.”
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