TUNGSTEN

Posted: September 19, 2017 in North Korea, Tungsten, USA
Tags: ,

North Korea’s economic output might be smaller than Vermont’s, but in the production of one thing the reclusive country recently outpaced the entire United States: tungsten.

Tungsten is a rare-earth metal whose price has surged 50 percent since July.Tungsten has the highest melting point of any metal, at 3,422 degrees Celsius, making it useful in light bulbs.

Smartphone makers need tungsten because it helps withstand electronic heat in touchscreens.

Armed forces need it for its ability to harden the steel used in missiles. Automakers use 25 percent of the global supply for their cutting tools.

Most of the world’s tungsten comes from China, where the government has been exerting greater control over production, in part because domestic demand has ballooned. The country makes more cars than the U.S. and Japan combined.

The U.S. has had concerns about the increasing price of the rare-earth metal since at least the 1960s.A London-trained American-Chinese citizen, K.C. Li, was credited with first trading the mineral in the U.S. His Wah Chang Corporation was established in New York in 1916.

The only other country with good tungsten deposits is Afghanistan. I suppose it is enough reason for the US to hang on in Afghanistan and reach them democracy.

https://www.bloomberg.com/news/articles/2017-09-10/china-sends-one-of-the-west-s-most-critical-materials-soaring

Photographer: Daniel Berehulak/Getty Images

China Sends One of the West’s Most Critical Materials Soaring

  • Tungsten prices have jumped 50 percent in the last two months
  • China is enforcing output quotas for the steel-hardening metal

The price of one of the most critical materials for the Western world’s economy and defenses is spiking faster than any major commodity.

Tungsten, used to harden steel in ballistic missiles and in drill bits, has surged more than 50 percent in the last two months amid growing concern about supply cutbacks in China, where about 80 percent of the metal comes from. The country is clamping down on polluting mines and enforcing production quotas.

“The Chinese have been trying to impose control over the production in tungsten,” said Mark Seddon, senior manager at Argus Consulting (Metals). “They’ve used environmental policy to clamp down on non-quota production.”

The price of tungsten in Europe has jumped 52 percent since early July, according to Metal Bulletin Ltd. The advance has beaten all 22 major materials in the Bloomberg Commodities Index. Tungsten has gained for six straight months, the longest rally since 2012.

The European Union classes tungsten as a “critical” commodity and the British Geological Survey places it at the top of its supply-risk list of materials needed to maintain the U.K.’s economy and lifestyle. In 2012, it became a flash point when then U.S. President Barack Obama filed a complaint to the World Trade Organization against Chinese supply curbs.

China limits supply to about 91,300 metric tons a year, but routinely breaks its quota by as much as 50 percent, partly because a lot comes as a byproduct from mines that produce other metals such as molybdenum, Seddon said.

China’s Impact

It seems that tolerance has gone, at least for now. China’s Ministry of Industry and Information Technology issued an edict on June 6 saying producers should stick to output quotas and that those without quotas, or which exceed the quotas, should halt production. Quotas also shouldn’t be granted to firms that infringe safety or environmental rules.

“The government wants to have control,” said Seddon, who has covered the industry for at least 15 years. “Whether this carries on into next year is more difficult to predict.”

It’s also been a wild year for many other lesser-traded metals. Prices for “light” rare earths including neodymium and praseodymium have also shot up as part of China’s mining clean-up. Battery materials such as cobalt and steel-hardener vanadium have surged, while minor precious metals like ruthenium rallied too.

Read more: Best-performing metals as hard to trade as they are to find

Tungsten, also know as wolfram, gets its name from the Swedish words for heavy stone and was first discovered in 1783. The light gray or whitish metal can be alloyed with steel to form materials that are stable at high temperatures. At more than 3,400 degrees Celsius (6,150 Fahrenheit), it has the highest melting point of any metal on Earth.

The biggest consumer is the auto industry, with about 25 percent of supply predominately used in cutting and machining tools. It’s also used in lighting, steelmaking and mining. Tungsten’s high density means it’s also used in missiles to help them penetrate defenses.

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Comments
  1. Arun Kumar says:

    Recently they have started mining in UK. Drakelands Mine in UK is the fourth largest tungsten mine in the world.

    Like

  2. Sunil Tinani says:

    The next wonder mineral is erbium. It will be coated on crystals that are used in quantum computing.

    I’ll recommend stocks into erbium mining and refining.

    Follow @TheBullBull on Twitter for the most relevant stock market chatter.

    Like

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