Low global demand for tungsten is likely to persist, with consumption falling by 19-20pc on the year as a result of consumer destocking, a global economic slowdown and geopolitical turmoil.
But tungsten demand could experience a recovery in the second half of 2020, as consumers replenish depleted inventories amid expectation of modest industry growth, delegates heard today at the International Tungsten Industry Association meeting in Stresa, Italy.
This year was a period of heavy destocking by consumers who had increased inventories sharply last year because of a perceived tightness in supply, Oliver Kinzel, director of sales EMEA for H.C. Starck, said.
Kinzel expects overall consumption to decline by 19pc to 15,400t of tungsten this year, down from last year's consumption level of 19,000t.
But the assumption is that inventory levels could be low by the end of this year, raising demand in 2020, he said.
Global Tungsten & Powders' (GTP) vice-president of government affairs and industry liaison, Stacy Garrity, painted a similar picture for the tungsten industry in 2019 and 2020.
With exports and domestic consumption falling, along with a strong currency, a worsening economic outlook and escalation of the US-China trade dispute, tungsten consumption is expected to drop by 20pc in 2019 to 104,815t, she said.
This decline in demand dragged on ammonium paratungstate (APT) spot prices across the international markets. APT fell to a 2.5-year low "but seems to have bottomed out", Garrity said, adding that there could be improvement in 2020.
The price for 88.5pc APT in Europe slid to $170-190/mtu in early September, under Argus data. It is the lowest range since the assessment of $170-180/mtu on 4 April 2016.
Since early September, prices have rebounded to $215-230/mtu in mid-October after the Fanya Metal Exchange's APT stocks were sold at above domestic Chinese prices to China Molybdenum, which improved the market outlook.
But lingering risks remain. "Pressure on economic development due to global trade issues is likely to remain, moving into 2020, with the impact of geopolitical instability difficult to predict," Kinzel said.
