Why tungsten carbide price increased?
The rise in tungsten carbide prices is due to the combined effects of supply and demand.
First, the supply side:
1. Reduction in mining indicators： Although China accounts for more than half of the world's tungsten reserves, mining quotas have been tightened year after year. The first batch of mining quotas for 2025 is only 58,000 tons, which is less than the previous two years.
2. Increased mining costs： The tungsten content of ore mined from major mines in Jiangxi, Hunan, and other regions is decreasing, from 0.5% to 0.3%, and mining costs are rising significantly.
3. The global supply situation continues to tighten: Although the Bakut mine in Kazakhstan has considerable reserves, its average grade is only 0.15%. According to a 2024 report by the US Geological Survey, smelting costs are significantly higher than the industry average. At the same time, the EU's Critical Raw Materials Act clearly requires that the self-sufficiency rate for strategic minerals be increased to 70% by 2027, up from the current level of less than 25%, accelerating the rebuilding of global supply chains.
Secondly, demand is showing resonance across multiple sectors.
1. Technological iteration in the photovoltaic industry has driven the complete replacement of traditional materials by tungsten wire and diamond wire. In 2024, the penetration rate exceeded 23%, driving an increase in tungsten consumption of over 25%.
2. The demand for tungsten carbide hard alloys in high-end manufacturing fields such as new energy vehicle motor rotors and precision machine tool cutting tools is growing at an annual rate of over 12%.
3. In the field of key materials for enhancing the performance of advanced equipment, tungsten alloys are an indispensable core component, with tungsten's unique physical properties underpinning its strategic value. With the highest melting point of 3,422°C, second only to carbon in nature, and an ultra-high density of 19.25 g/cm³, which is 2.5 times that of steel, along with a maximum hardness of 7.5 on the Mohs scale, these characteristics make it the mainstream material for cutting photovoltaic silicon wafers. Tungsten wire with a diameter of 0.035 mm serves as the base material for the core components of heavy-duty equipment and is a key raw material for semiconductor crystal cutting technology.
4. At the current rate of mining, China's tungsten reserves will last for a maximum of 36 years. The European Union is even more concerned, listing tungsten as an extremely scarce resource.
In summary, this round of price increases essentially reflects the transformation of tungsten from a common industrial raw material to a strategic resource.
In the short term, photovoltaic companies are stocking up for September, which may lead to price increases. However, downstream hard alloy manufacturers may find it difficult to accept the price increases, as their profits will decrease, potentially leading to reduced purchases.
In the long term, the development of new energy and military industries will drive an increase in tungsten demand.
Ultimately, the rise in tungsten prices reflects deeper issues. In the era of new energy, whoever controls key resources controls the initiative in development. This is not a simple market fluctuation, but a profound change in the global industrial landscape.
