COMMENTARY — Tungsten and the Chinese market

China is affluent in tungsten resources and its operational costs are lower than those of most tungsten producers in the world. Although the demand for tungsten in the world market is not strong, if China were to close its tungsten mines, hundreds of thousands of people would lose their jobs, and so China will continue with its production of this rare metallic element.

Demand in both domestic and overseas markets is not expected to increase markedly in the next few years, and the Chinese government is expected to continue taking measures to control production of the element. For the time being, China’s tungsten production is showing a downward trend and it is estimated to have fallen to a level below 20,000 tonnes in 1993. The biggest problem facing the Chinese government is how to settle the employees from the closed and transferred tungsten mines. In short, China’s tungsten production can be controlled below 20,000 tonnes.

In terms of consumption, the demand for tungsten among steel makers will remain at the current level, while demand in the cemented carbide sector will rise to some extent, but the growth will not be as great as in the past 10 years.

Considering the trends of tungsten consumption in the two traditional markets, before the year 2000, China’s tungsten consumption will show a low-speed increase and the growth rate is estimated to be less than 1%. China will focus on speeding up development of upgraded tungsten products and will attempt to improve the quality of manufactured products. In future, the application of high-efficiency, cemented carbide cutting tools, high-density tungsten alloys, tungsten electrodes, tungsten wire and tungsten chemicals will certainly have an impact on markets. China has a population of more than 1.1 billion, and the tungsten market there is believed to be broad. As long as we try hard to open up the market, the demand for tungsten in China will be able to maintain an upward trend for a long time.

Substitutes for tungsten in China are still at the initial stage of development, and, indeed, are non-existent in some areas, so China’s tungsten industry will not face competition from substitutes.

— From a recent newsletter of the International Tungsten Industry Association, based in London, England.