As more tungsten applications were developed in the mid-2000s, the metal's price skyrocketed
Los Angeles, CA (PRWEB) March 20, 2012
Before the mid-2000s, the Tungsten Carbide Manufacturing industry managed minimal growth as demand for tungsten products increased at a marginal rate. Furthermore, governments held substantial stockpiles of tungsten, creating a depressing condition for prices. Tungsten is typically alloyed with carbon to create tungsten carbide, which is used in a variety of industrial applications, especially in industrial machinery, tools and abrasives. Tungsten and tungsten carbide products have grown in use in machining and drilling applications where material strength is increasingly sought after for quality and productivity enhancements. “As new applications for the metal and its various alloys were developed and demand from the manufacturing sector boomed, prices began to increase and stockpiles began to be sold off,” explains IBISWorld industry analyst Brian Bueno. Subsequently, demand outstripped supply and prices surged. Rapid global economic growth before the recession further intensified demand, and the industry grew at a breakneck pace.
Over the five years to 2012, US production has increased at an annualized rate of 17.9% from about 4,300 metric tons in 2007. In 2012, the industry is expected to manufacture about 9,900 metric tons of tungsten products. Although the recession laid a speed bump in the industry's way, the continued rise in global tungsten demand, combined with tightened Chinese control of raw mined tungsten, pushed prices higher over 2010 and 2011, Bueno says. As these demand conditions continue to play out in 2012, industry revenue is expected to jump. Over the past five years, Tungsten Carbide Manufacturing industry revenue is estimated to grow 22.4% per year on average.
The industry is anticipated to continue a period of strong growth over the years to 2017. US production of tungsten products is expected to increase as downstream markets in machinery manufacturing and other industrial sectors demand more of the metal and return to health alongside a growing US and global economy. Global trends in tungsten production, such as China's tightening control of mining output, will also continue to raise prices. Because this industry produces such a specific product, it is dominated by a few specialized companies. It is also concentrated because tungsten manufacturers rely on steady long-term contracts with downstream industries that demand the intermediate tungsten materials that this industry produces. Concentration in this industry is expected to remain moderate because the number of companies does not fluctuate in response to high fixed costs and input costs. For more information, visit IBISWorld’s Tungsten Carbide Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
Firms in this industry process tungsten to create tungsten carbide powders and other intermediate products later used to produce industrial machinery, tools, abrasives and jewelry. Companies that process tungsten for other purposes are also included in this industry. Producers of end-use tungsten products (e.g. tungsten-containing drill bits) are excluded from the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
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