Ferro tungsten hits record high on supply

Reuters reported that Ferro tungsten prices hit a record high and could rise further on supply constraints from top producer China and recovering demand as consumers replenish depleted stocks.

Prices of ferrotungsten used in steel to make heavy equipment like industrial drills rose to USD 43 per kilogram to USD 45 per kilogram from USD 41 per kilogram to USD 43 per kilogram last week.

Prices have risen 60% since January last year and around 76% since December 2008 when consumers slashed stocks on expectations of a prolonged recession.

A UK based trader said that Ferro tungsten was up quite significantly this week on strong demand and little supply. Major producers in China are now on holiday but their stocks were already depleted. Prices could definitely go up further. Tungsten production in recent weeks has fallen sharply in China which produces about 90% of the world's ferrotungsten.

Traders said that the Chinese government maintains a tight grip on tungsten mining so the market shortage may worsen. China keeps a close eye on its natural resources. Producers of ferrotungsten also have to compete with tungsten ATP producers for raw materials and increasing demand for tungstate APT means competition has became stiffer and prices higher.