Reliable tungsten producer
GTP has responded to the massive drop in the price of tungsten with a root-and-branch modernization and automation of its production operations. With new products for key markets and a global sales push, the company believes that it is in good shape to face the future. An Interview with Dr. Andreas Lackner.
livingmetals: How has the raw materials price changed over the past years?
Dr. Andreas Lackner: In common with the prices for many other raw materials, tungsten prices have dropped significantly over the past years. And tungsten was among the hardest hit by falling prices. Since 2014, the price of tungsten has fallen by more than 60 percent – from 420 dollars per metric tonne for the intermediate product APT (ammonium paratungstate) to 160 dollars*. We are currently seeing prices recover slightly.
livingmetals: What is causing this trend?
Dr. Andreas Lackner: The falling price is the result of a global surplus of tungsten ore concentrate and chemical processing capacity. There are a number of different factors at play: On the one hand, there is the general weakness in the global economy. And then there is the dramatic fall in the oil price, which has hit investment in the oil and gas industry, particularly in the USA, and this is an important market for tungsten-based carbide tools. And thirdly, there is the fact that China dominates the tungsten market. It is there that some 80 percent of the world’s tungsten reserves are to be found, and production quantities are “partially state-controlled”. Despite a huge drop in demand, far too much is still being produced there. We estimate that China’s overcapacity is double the annual global production volume.
livingmetals: Surely low raw material costs are what the processing industries dream of?
Dr. Andreas Lackner: For producers, it is, of course, an ideal scenario. The problem is that all the world is tungsten mines are currently selling at prices that lie below the production costs. Even Chinese mines can barely show a profit at a price below 220 US dollars per metric tonne. As a consequence, many mines, particularly those in the West, have already cut back
or shut down operations.
livingmetals: What steps is GTP taking to remain competitive?
Dr. Andreas Lackner: We are cutting costs, investing in automated processes and expanding our recycling capacities in order to become less dependent on primary raw materials. With new products for key markets and a global sales push, we should be in good shape as soon as raw materials prices begin to pick up again.
livingmetals: And how do customers benefit from this?
Dr. Andreas Lackner: I am convinced that the reliability of tungsten supplies will again become an issue in the medium term. The price of raw materials rises and falls on a five to ten year cycle. GTP has put everything in place to ensure that it will continue to remain an independent and reliable tungsten producer with a secure supply of tungsten.
livingmetals: What is the significance of tungsten for industry?
Dr. Andreas Lackner: Tungsten is an integral part of the refractory metals industry, even if the difficulties of processing tungsten and the high costs involved mean that people regularly try to replace it in this or that application. But in its primary application, tungsten is virtually impossible to replace: Tungsten carbide is the material used to manufacture the majority of tools in the machining industry and extremely wear-resistant semi-finished products in the world of industrial manufacturing.