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Tungsten Market Spikes Cutting Tool Prices

The key raw ingredient in tungsten carbide tooling is wreaking havoc with cutting tool prices for distributors, with up to 20%-plus price jumps. Worldwide markets for Ammonium Para Tungstate (APT), the key raw ingredient for carbide tooling, are extremely volatile in 2005 so far. APT prices have risen by as much as four-fold in the past ten months, from an average of below $70 per metric ton to $250-$300 per metric ton.

Distributors are seeing double-digit price increases or surcharges, some above 20 percent recently, according to one report. Carbide tool manufacturers are getting notice of raw material increases in terms of a few days; they are implementing surcharges on current contracts, as well as notifying distributors of price increases later in July. One carbide cutting tool manufacturer instituted a 6% price increase May 1, and is following with an additional 9% increase in July to catalog prices.

Causes include increased speculation, demand for tools and steel in China, lack of investment in new mine capacity, and overall strong demand. In the U.S., cutting tool manufacturers are pushing the U.S. government to release tungsten strategic reserves to stabilize the market and dampen speculation. More in the next MDM.

Cutting Tools Price Index: Jan, 1995 - May, 2005

Metals Price Index: Jan, 1995 - May, 2005

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