US tungsten carbide scrap prices were steady in October as easing supply tightness was partially offset by rising intermediate costs, but prices are hovering near a seven-year high on logistical constraints and steady demand.
Argus assessed prices for monthly tungsten carbide scrap inserts and rounds prices were unchanged at $10.50-11.25/lb on 29 October from the previous month, after rising by 41pc from $7.70/lb in January. Prices have hit the highest since the market was pegged at an average of $13/lb on 30 September 2014.
Traders noted multiple spot transactions within the current range in October. Quotations to large processors and end users were as low as $10.50/lb and neared as high as $12.50/lb for sorted, processed lots greater than 5,000lbs.
Spot liquidity varied on a case-by-case basis as some participants traded large volumes of scrap in the month, while others noted limited demand from end users. Still, availability rose in the month, dealers said.
Rising intermediate costs may make carbide scrap a preferable option for feedstock for end users, market participants said. One APT producer received offers for solid scrap at around $23/kg this month and said that although prices are higher than earlier this year, availability has increased. Intermediates producers have also noted that tungsten demand for the first half of 2022 remains strong as "consumers are trying to buy as much as possible" to avoid shipping delays, one market participant said.
A lack of prompt availability pushed intermediate prices higher, bolstered by higher export prices in China. Energy consumption curbs in key producing regions Jiangxi and Henan lifted input costs in China as intermediate availability tightened, which pushed prices for virgin material higher. Ammonium paratungstate (APT) du Rotterdam (per mtu WO3) prices increased to $320-325/mtu on 29 October from $313-316/mtu on 30 September.
APT export prices rose to $310-315/mtu fob China on 21 October, up from $305-310/mtu fob on 6 October. Export prices for tungsten carbide powder (W 99.7pc) out of China rose to $41.00-42.00/kg ($18.60-19.05/lb) on 29 October from $40.00-41.00/kg on 30 September.
Industrial production of US machine shop turned product and screw, nut and bolt increased to a reading of 92.39 in September from a reading of 88.39 a year earlier. Sequentially, the reading declined from 93.04 in August. The index measures the real output of machine shops engaged in machining metal and plastic on a job or order basis, machining precision turned products, or manufacturing metal bolts, nuts, screw, rivets, and other industrial fasteners with 2012 set to 100.
Suppliers have highlighted unrealised demand in the aerospace and automotive end markets. Aerospace demand started to regain traction recently as Boeing began destocking inventory, while automotive production has been hampered by the global semiconductor shortage.
A large portion of the market also noted concerns that upward momentum could be slowing as the year draws to a close. The last two months of the year are typically less active as traders sell inventory to meet quotas and companies attempt to minimise inventory overhang heading into the new year. Additionally, more market participants take time off for the holiday season, which can affect spot liquidity.
