Ferro-tungsten prices have fallen to their lowest level in Europe in 17 months, amid consternation and confusion over the reason for the fall.
Metal Bulletin’s quotation dropped to $39.70-40.70 per kg on Wednesday August 20, from $40-40.80 per kg previously, as theories swirl on the cause.
The move marks the first time the ferro-tungsten price has fallen below $40 since March 2013, and on August 21 last year the price was at $48-49 per kg, just off a peak of $50 in July.
Some participants have suggested material with an unusual specification may have crept into the market, while others have said they believe sellers may be offering aggressively low numbers, and still others have said one or more market participants may be liquidating stock.
“The suggestion is that it’s really about liquidating stock in Europe. Someone is willing to sell at whatever price they can get,” a trader said.
“I don’t think there’s off-grade material or scrap being offered, though. I think that would be even lower than this now.”
Offers for material to be shipped from China are higher, meanwhile, suggesting a potentially different trajectory for the price into the autumn.
“Chinese shipment prices are determined by domestic prices and those are pretty supportive at the moment,” a source said.
Prices are now close to or even below the cost of production, he added, which means there is likely to be some resistance to further price falls from producers.
APT prices remained flat at $360-370 per mtu, meanwhile, on a dearth of concluded business, although stock levels on the Fanya Exchange in China have risen steadily in recent months, climbing to 19,027 tonnes as of Wednesday.
“The Fanya Exchange has been busy buying excess APT stocks in China. This will also help to support the market,” a second trader said.
“We hear strong rumours again of the [State Reserve Bureau] potentially doing their buying in [the fourth quarter], so most people have a wait-and-see attitude on the market, as chances are it will move up as we head into September.”
Buyers have yet to return from summer shutdowns, the second trader added, and little movement is expected before the end of August.
Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb