Market dynamics in the tungsten space are becoming increasingly positive…
Sometimes, it’s easy to feel that tungsten doesn’t get the attention it deserves.
That’s perhaps because the tungsten price is less likely to move as spectacularly on economic or extraneous events as the lithium or nickel price, due to the fact that the overall market is smaller and less widely speculated over.
But make no mistake. Tungsten is strategic, and its importance is only set to grow in the coming years.
In terms of market size, a representative straightforward projection is that the 91,000 metric tonnes of tungsten required by the world in 2020 is likely to grow to around 115,000 metric tonnes by 2026.
That represents a compound annual growth rate that is attractive enough by itself.
But in these days of elevated global tension, there are other important factors to consider.
Where the tungsten comes from and who controls it is going to be of increasing importance in the coming years.
In historical terms, this is nothing new.
But for thirty years, policy-makers have been able to factor in integrated supply chains that involved both China and Russia, and which included raw materials from both countries.
Those supply chains can now no longer be taken for granted. And it may be that in the future, when we come to talk of the global market size of a commodity like tungsten, not all of it will be available to every market participant.
It’s a reality that the US was slow to wake up to, but which it is now catching onto fast.
This year, tungsten retained its place on the United States Geological Survey’s (USGS) list of minerals considered critical to the US economy, partly because of its versatility, and partly because 80% of tungsten is produced by China.
That weighting towards China could in theory render the USA vulnerable to future supply constraints and creates a highly propitious regulatory backdrop for the Pilot Mountain tungsten project, currently held by Power Metal Resources# subsidiary Golden Metal Resources, which is expected to be seeking a listing on AIM in Q4 2022.
For a closer look into the tungsten market and also the Pilot Mountain tungsten project, click on the following button to download the report.
NB: The above text has been reproduced and edited from “The Power Bulletin” written by Paul Johnson, the CEO of AIM listed Power Metal Resources plc (POW.L), focusing on Tungsten, which was distributed in June 2022 to its subscriber list.
# First Equity Limited is the Joint Broker to Power Metal Resources plc and the ## Lead Placing Agent for the Golden Metal Resources plc IPO.
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