2018 started with experts predicting that tungsten prices could trend higher if China — the world’s leading producer of the critical metal — reduced output. 

That call was in some ways correct. Though prices hit three-year highs due to production limitations and growing demand for the versatile metal, they had flattened by the end of the year. 

As 2018 comes to an end, the Investing News Network (INN) is looking back at the main trends in the space this year and what’s ahead for prices in 2019. Read on to learn more about the tungsten outlook.

Tungsten trends 2018: Price growth short lived

As mentioned, analysts believed at the beginning of the year that tungsten prices would continue on the positive trajectory they started in 2016. However, the metal ended the year slightly flat — much to the dismay of market watchers and producers.

“At the end of 2017, our expectations were for the strengthening of tungsten prices to continue with some modest levels of additional production from new or recently commissioned tungsten-mining operations,” said Mick Billing, chairman and CEO of Thor Mining (ASX:THR).

“We also expected that Chinese production costs would continue to rise, but that production levels from China would remain relatively constant,” he added.

Midway through the year, China announced that there would be restricted supply of ammonium paratungstate (APT) as key APT smelters in Jiangxi province were shuttered in order to comply with government regulations around tailings storage and slag treatment.

Tungsten outlook 2019: Less production, more demand

Despite demand expectations, tungsten prices took a brief stumble in mid-2018, coming to rest at US$340 to US$345 per metric tonne.

“The slump of 20 percent in the APT price in July and August has probably challenged all in the industry. Since then, the market has seemed to lack direction and has been looking for a catalyst to move either way,” explained Billing.  

Looking ahead, demand for the critical metal, vital in making steel stronger and more durable, is expected to increase as stringent building regulations in China regarding the strength of industrial steel are implemented.

However, while Chinese consumption of the metal is stepping up, so too are environmental regulations around extracting tungsten, creating an air of uncertainty when it comes to output.