PODCAST: The curious state of the European APT market

In recent months, there has been growing disagreement in the ammonium paratungstate (APT) market over exactly where price levels in Europe should sit.


Date: 7 February 2013

Length: 2:58

In recent months, there has been growing disagreement in the ammonium paratungstate (APT) market over exactly where price levels in Europe should sit.

Towards the end of 2012, prices began to decline markedly as trading became thinner and thinner, until the only deals left were those at considerably lower numbers.

This caused some consternation among market participants, as they believed prices should have remained at levels of about $380 per mtu, seen earlier in 2012.

However, without so much as a bid or offer to back this up, the quote slowly moved further and further down, eventually landing at $280 per mtu on the bottom end and $310 on the top end.

Deals were still being reported, but not at the prices certain participants claimed they should be.

Moreover, participants in both China and Europe began to complain that the quoted levels were too low, citing the floor price of $340 set by China Minmetals – but still evidence for higher levels was scarce at best.

Gradually, a gap had opened between the Chinese and the European markets – disputed by some, but accepted by others, who began to do business at lower prices themselves.

On top of this, market participants began to disagree over whether a premium should be applied to yellow or blue tungsten oxide, both of which have much higher purity levels of tungsten trioxide.

There was argument, furthermore, over the validity of the Chinese floor price and over how best to reflect the western market.

The best course of action, some argued, was to use only the concluded business being reported in Europe, as well as occasional bids and offers when there was nothing else to go on.

Others argued, on the other hand, that the Chinese market should have a greater influence and that the gap should never have appeared in the first place.

For a period of a few months, however, it became necessary for Metal Bulletin to maintain a much lower quotation as the market remained extremely illiquid, despite a number of deals at lower prices over an extended period.

It has long been policy to focus mainly on concluded business – and even better, contracts we are able to see and analyse – and the APT market was no different.

Without firm evidence that prices should be higher, they continued to decline: it is difficult to ignore hard facts, and impossible to pay attention to what’s not there.

As 2013 rolls on, however, there are some signs that business in Europe is beginning to pick up as market participants look to restock.

Business has been reported in Metal Bulletin’s current European free market range of $285 to $315 per mtu in Austria and the UK, albeit in relatively small quantities.

And as of Monday February 4, prices closer to the fob main Chinese ports quotation were starting to emerge – and for larger quantities.

It remains to be seen whether this trend will continue, but for now, the signals are turning positive, and the gap between the European and Chinese quotations may be closing.

Claire Hack
Twitter: @clairehack_mb