Global Tungsten Concentrate Market - Consumption Growth to Remain Robust amid Rising Demand from Steel and Machinery Sectors

Other Mining And Quarrying October 02, 2018
Author: Anna Sergeeva
Market Analyst

IndexBox has just published a new report "World - Tungsten - Market Analysis, Forecast, Size, Trends and Insights". Here is a summary of the report’s key findings

Global Tungsten Concentrates Consumption Resumed Its Increase

In 2017, the volume of the global tungsten concentrates consumption stood at approx. 105K tonnes (IndexBox estimates). After a noticeable contraction in 2009, the volume of consumption recovered in the following year and then retained steady upward trend pattern, driven by rising global steel output and consumption. In 2016, however, the market volume declined somewhat due to an overall slowdown of the global economy, a slump in oil drilling projects hampered by low oil prices and the softened growth of Chinese steel industry amid the slowdown of the Chinese economy. In 2017, the tungsten concentrate market bounced back pronouncedly, thanks to rising global economy, infrastructure projects being implemented in China, and improved industrial manufacturing and oil and gas drilling in the U.S. 

In value terms, the global tungsten concentrates market stood at $19B in 2017, which was relatively unchanged against the previous year. From 2014-2016, the market value declined sharply, given a downward trend pattern of the prices. Global average prices for tungsten concentrates have been declining gradually from 2014, reflecting the decreasing steel prices, but bounced back slightly in 2017, which could be a sign of market stabilization.

China Remain Top Tungsten Consumer Worldwide

China (81.3K tonnes) dominates in the global tungsten market, accounting for 77% of the global figure. China was followed by Viet Nam (7.8K tonnes), Russia (2.8K tonnes), the U.S. (2.1K tonnes), the Netherlands (1.6K tonnes) and Austria (1.6K tonnes), which together comprised a further 15%. Moreover, China also remains the largest producer of tungsten. From 2007 to 2017, global tungsten consumption annually grew by a healthy +4.7%. The highest annual growth rates of tungsten consumption from 2007 to 2017 were recorded in Viet Nam, with +16.0% growth, the Netherlands, with +14.7% growth. 

Per capita tungsten consumption in China was estimated at 56 kg/year, much higher than the global average (13.8 kg/year).

The highest level of tungsten consumption was registered in Austria (184 kg/year), and in the Netherlands (96 kg/year) and Viet Nam (81 kg/year), where per capita grew by an average +14.4% and +15.0% per year, respectively.

Global Tungsten Concentrate Market Is Set to Grow Robustly

Tungsten is widely used in metallurgy as a steel component to advance steel characteristics, as well as in various industries which require high durability of machine parts (automotive and aircraft, construction, electronics, machine shops, mining and oil and gas drilling).  Therefore, demand for tungsten and, consequently, tungsten ore would be largely determined by the development of steel industry and other machinery-intensive industries, which will generally be conditioned by the dynamics of the global GDP.

According to the IMF forecast, the growth of the world economy will be about 3.7% in the medium term. The critical impetus for growth is to come from emerging Asian countries, where the industry will develop against the backdrop of the rapid development of the economy and the increase in the income of the population, which create a stable base for the growth of consumption of various goods. Besides, resumed growth of oil production and improving industrial manufacturing in the United States will also contribute to the growth. 

The world steel market has been growing gradually so far with the major input being made by Asian countries, China firstly. China is the world largest steel producer and consumer and thus, the largest tungsten and tungsten ore consumer. Chinese steel production shows stability due to robust domestic demand and slightly weaker exports as compared with the previous years. The US trade restrictions on Chinese steel have led to a further slowdown in Chinese exports, but the local market is sufficiently sustained by domestic demand. The key production drivers are the overall industrial expansion and buildings construction thanks to an ongoing urbanization. City infrastructure expansion and a rapid regional development in China due to capital reallocation from the more developed coast cities are having a very strong impact on the steel industry.

Driven by the global economy growth, which boosts the downstream industries for tungsten, the performance of the market is forecast to retain its upward trend with an anticipated CAGR of +3.1% for the period from 2017 to 2025, which is expected to bring the market volume to 134K tonnes by 2025.

Global Tungsten Concentrate Output Accelerated in the Last Year

Global tungsten production amounted to 102K tonnes in 2017, growing by an average annual growth rate of +6.1% per year, over the last ten years. Over the last year, production increased by 8K tonnes (or 9.2%) from the previous year; this level was also 81% more than the production level of 2007.

China Took 77% of Global Tungsten Production

China remains the largest producer of tungsten in the world, suppling 79.0K tonnes in 2017. It was equal to 77% of global tungsten production. After a slight decrease of the Chinese output in 2016, it bounced back in 2017, thanks to the improved global economy and strong domestic demand. The other countries with a largest production volumes were Viet Nam (7.2K tonnes), Russia (3.1K tonnes), Canada (2.1K tonnes). Viet Nam experienced a robust increase in tungsten concentrate production over the last decade, while in Russia and Canada, it decreased somewhat against the outset levels.

About 11% of the Tungsten Concentrates in the World Are Imported, Compared to 32% in 2007

The share of imports in terms of the global tungsten concentrates consumption decreased from 32% in 2007 to 11% in 2017. This was due to the volume of imports to China, Austria, and Vietnam declined significantly, being replaced by increasing domestic output. In case of China, that was particularly sensitive, as China remains the world largest consumer.

Canada Has Outstepped Russia in Terms of Global Tungsten Concentrate Exports

In 2017, the volume of global exports totaled 8.7K tonnes, which was 29% less than the highest level of exports observed in 2014. A pronounced decline over the period from 2009 to 2010 was followed by recovery over the next two years; however, after stabilization, it turned downward again in 2015, levelling off through to 2017. In value terms, exports amounted to $168M in 2017, remaining relatively stable over the last year, after a decline in 2015. 

Canada (1.9K tonnes), Russia (1.2K tonnes), Mongolia (792 tonnes), Bolivia (754 tonnes), the U.S. (619 tonnes), Rwanda (481 tonnes), Malaysia (453 tonnes), and Portugal (451 tonnes) were the main global suppliers of tungsten with a combined share of 78% of global exports. 

From 2007 to 2017, exports from Mongolia with a highest average annual rate of +13.3% per year, however, the other major suppliers experienced a negative dynamics.  The other countries experienced more modest or even negative paces of growth. While the shares of Mongolia (+7 percentage points), Canada (+3 percentage points), Bolivia and Portugal (+2 percentage points, each) increased, the share of Russia reduced from 25% in 2007 to 14% in 2017. The shares of the other countries remained relatively stable over the period under review.

The U.S. Remains the Largest Global Importer of Tungsten

The volume of global imports totaled 11K tonnes or $185M in 2017. Imports trend pattern generally mirrored that of exports: these trade flows globally complement each other. 

In 2017, the U.S. (2.7K tonnes), China (2.4K tonnes), the Netherlands (1.7K tonnes), Korea (0.9K tonne), Russia (0.9K tonnes), Austria (0.7K tonnes) and Viet Nam (0.6K tonnes) constituted the leading destination of tungsten imports, comprising 87% of global imports. Imports into the Netherlands expanded with a CAGR of +12.3% per year over the last ten years, while the other countries reduced their imports notably. 

While the shares of the Netherlands (+13 percentage points) and the U.S. (+8 percentage points) increased, the shares of Viet Nam (-3 percentage points), China (-5 percentage points) and Austria (-6 percentage points) reduced. The shares of the other countries remained relatively stable over the period under review.

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  • tungsten market share
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  • key tungsten producers

Source: World - Tungsten - Market Analysis, Forecast, Size, Trends and Insights