Against the backdrop of a sharp surge in the price of tungsten APT (ammonium paratungstate), tungsten scrap prices have recorded an extraordinary rise . Most recently, cemented carbide scrap has reached an unprecedented level of ¥30,000 per kilogram, a price never seen before. This fierce competition for raw materials and remarkable market escalation has been driven by a dynamic structural change taking place at the core of the market. In actual transactions, tungsten APT has climbed further to $2,800–3,000/mtu, marking yet another all-time high.
However, on the ground, some traders have begun to comment that cemented carbide scrap prices have already started to decline. The question now is whether the market should interpret the ¥30,000/kg threshold as a clear signal that prices have fully peaked. Based on the latest market movements and perspectives from industry participants, this can be examined logically.
(Trend in Tungsten APT Prices: US$/mtu)
Trend in Cemented Carbide Scrap Prices (Japan Domestic Average, JPY/kg)
China Shifts from Exporter to Importer: A Structural Change Pulling in the Global Market
A key factor in understanding this extraordinary price surge is the dramatic change in China’s tungsten scrap purchasing behavior, which has become increasingly evident since last year. China, once a major supplier and the world’s largest exporter of tungsten scrap, has now clearly shifted into becoming an importing country.
The impact of China beginning to aggressively absorb tungsten scrap from around the world, either to satisfy strong domestic demand or from the perspective of strategic resource security—is immeasurable. This fundamental shift in global supply-demand structure, driven by what has long been called the “world’s factory,” concentrated demand sharply toward scrap as an alternative raw material, becoming the biggest factor behind the intense competition and panic buying seen this time.
An “Abnormal Market” Far Beyond Industry Expectations
The extent to which this market exceeded expectations is also evident from the actions of traders working directly in the field.
One veteran trader sold his inventory last November at ¥15,000 per kilogram. Considering the supply-demand environment at the time and past market trends, ¥15,000 was already a sufficiently high level to secure profit, making the decision to sell at that point extremely rational and orthodox. No one, not even professionals operating on the front line of the market, could have imagined that just a few months later prices would rebound to ¥30,000 per kilogram, double that level. It was an “abnormal market” beyond normal market assumptions.
Is ¥30,000/kg the Ceiling? Logical Reasons Behind a Peak-Out
The fact that prices have now begun to decline strongly suggests that the market has reached a clear turning point. The reasons why ¥30,000/kg can be regarded as the peak are summarized in the following three points:
1. Limits of Real Demand and the Wall of Price Pass-Through
A level of ¥30,000/kg likely exceeds the limit at which end users, such as cemented carbide tool manufacturers, can pass costs on to product prices. Speculative buying or purchases driven by urgency without real demand eventually lose momentum. It is natural to conclude that the market effectively hit a ceiling when buyers began restricting procurement, judging that “these prices are no longer economically viable.”
2, A Pause in Chinese Buying and Inventory Adjustment
China’s aggressive purchasing of global scrap appears to have slowed, either because procurement targets were temporarily met or because of caution toward excessively sharp price increases. Once the momentum of the largest buying force weakens, material held for sale at high prices begins to accumulate in the distribution market, quickly turning into downward pressure.
3. Psychological Milestone of ¥30,000
In commodity markets, round numbers function as powerful psychological resistance levels. Reaching the major ¥30,000 threshold likely created a sense of achievement among many market participants, triggering widespread profit-taking and initiating the decline.
Outlook Going Forward
The current tungsten scrap market can be viewed as entering a correction phase, moving away from an overshoot caused by the structural shift of China becoming an importer, and returning toward price levels more consistent with actual demand. Therefore, judging ¥30,000/kg as the near-term peak is highly reasonable.
The focus from here will be on how quickly prices decline and where the bottom forms. In particular, the key factor determining market resilience will be identifying at what price range China, after absorbing global supply, returns to the market as a buyer. Close attention must be paid to APT price trends and actual demand from cemented carbide tools, while strict risk management remains essential in this highly volatile market environment.
(Original Article by IRuniverse YT and translated by Rohini Basunde)
