The prices for tungsten have skyrocketed as much as 81 per cent over the last year due to tight supply chains. China's second largest tungsten producer announces a three month shut down for repairs, adding scarcity in the market. Also, tungsten miners announce developments on their projects.
By Michael Montgomery—Exclusive to Tungsten Investing NewsTungsten is expected to have supply shortage issues in 2011 stemming from export restrictions from China. Due to supply issues the metal has been placed on a list of critical strategic metals by the U.S. and the European Union. Yesterday, China's second largest tungsten producer, Jiangxi Tungsten announced that it will shut down their plant for 3 months for a regular overhaul of the facility. This decrease in supply will put further pressure on supply in the first half of this year and may affect prices that are already around record levels. The price of tungsten APT has risen 81 percent since year over year, from US$185 per MTU to its current price of $335 per MTU. “Tungsten concentrate is trading at 111,000-113,000 yuan ($16,742-17,043) per tonne on Wednesday, with prices in the higher end rising 1,000 yuan from last week,” stated Metal Bulletin. The decrease in supply from the Democratic Republic of Congo (DRC) due to the conflict minerals bill passed by the U.S. government is also another factor to consider for supply-demand fundamentals in this market. The call for tracing the source of minerals in conflict zones has hit a road block due to a lack of funding. “We were already working to tight timescales with no untraceable material being acceptable to the markets after April 1", stated Kay Nimmo, sustainability and regulatory affairs manager for the International Tin Research Institute. While the decrease in supply from the DRC is minor, as the nation only accounts for 2 to 4 percent of world supply, every bit adds to the tightness of supply chains. Tungsten Mining NewsOrmonde Mining Plc. (LON: ORM) recently announced that the company had submitted applications to Spanish authorities for their Barruecopardo Tungsten Mine. “The submission of the application for a Mining Concession is a major milestone in our roadmap to tungsten production at Barruecopardo by late 2012,” stated Kerr Anderson, Ormonde's Managing Director. According to the company, the mine when in full production is capable of producing upwards of 8 percent of non-Chinese tungsten. The total resource base is 10.9 Mt grading 0.45% WO (tungsten trioxide) in the Indicated and Inferred Mineral Resource categories. The mine is 90 pe cent owned by Ormonde, the remaining 10 percent is owned by Siemcalsa, a regional, partially state-funded company. Malaga Inc. (TSE: MLG) announced record production numbers in 2010 from their Pasto Bueno tungsten mine in Peru. The mine produced “a record production of 71 996 MTU… an increase of 13.6% compared with 2009. This increase stems from the expansion project that Malaga undertook in 2009 which delivered increased production capacity,” stated the press release. Woulfe Mining Corp. (CVE: WOF) announced that the company has closed the CDN$10 million deal with Korean Zinc for funding towards the company's Sangdong Tungsten-Molybdenum Project. “The direct investment into the Sangdong tungsten-molybdenum project means this project will progress as it is fully funded and there is no further dilution to Woulfe shareholders for the Sangdong project,” stated Brian Wesson, President and CEO of Woulfe Mining. The funding of the project also allows the company to look for other projects to add to shareholder value. Tungsten Price Rises on Tight Supply from Tungsten Investing News