US prices for soft forms of tungsten scrap, including powders and shavings, are expected to retain a wider-than-usual premium against hard scrap — inserts, blanks and wear parts — heading into 2023 amid increased demand from processors.
Argus' US tungsten carbide (WC) scrap inserts price declined for eight consecutive months to $8.75-9.50/lb at the end of November from the 2022 peak of $12.50-13.00/lb in April.
In typical trades, dealers generate a package with a mix of hard and soft tungsten scrap — sometimes with 10 times more hard scrap than soft — but spreads between the two forms of scrap have widened in recent months with processors in many cases requesting individual packages of soft scrap.
As a result, processors have been paying as much as a $1.50-2.00/lb premium for soft scrap compared with hard scrap, compared with slim-to-no premium in prior months.
Market sources expect this trend to continue for the foreseeable future as processors target increased output of intermediate tungsten products, such as ammonium paratungstate (APT), for which soft scrap is a better suited raw material.
Soft scrap usually requires a chemical recycling process that involves acid leaching and either oxidization or alkaline fusion to reclaim APT. Hard forms of tungsten scrap require an additional crushing and milling or zincing process before leaching.
In addition, spent hard scrap generation rates build considerably more volume than soft scrap generation and therefore command a similar price to smaller lots of more readily intermediate-reclaimable soft scrap, as hard scrap's chemical specification uniformity is distributed across greater quantities. To generate substantial inventories of soft scrap, suppliers typically must engage in a greater amount of hard scrap machining.
As the price buyers are willing to pay for multiple tons of soft scrap compared to hard scrap has widened, spot market liquidity for the grade has grown.
Market participants estimate that a premium for soft scrap might be the new normal in the market.
Sources were uncertain about the origin of the increased APT demand domestically that has supported the soft scrap premium, but cited some key buyers with soft scrap processing equipment as the possible cause for the ramp up in activity.
US January-October imports of tungsten oxides in 2022 totaled 1,149 metric tonnes (t), a decline from 1,382t of imports in the same period last year.
As a result, separate pricing tiers between the two forms of tungsten scrap may become more standardized, with the distinction playing possibly a larger role in the future.
