← The HC Commodities Podcast
The HC Commodities Podcast
Tungsten with William Parry-Jones
00:42:11
Tungsten is vital to military hardware and industry, including oil drilling. Yet, prices have risen tenfold in the last year, threatening both. This is a story of China's production capture, now wielded as an economic weapon. What is Tungsten, how is it mined and made, and how did we end up here? And what does it mean for the West? Our guest is William Parry-Jones, founder of Wolfram Advisory, a consultancy supporting clients in capturing value across the Tungsten and other critical minerals supply chains.
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- [00:00]
A
Foreign. Welcome to the HC Commodities Podcast, a podcast dedicated to the commodities sector and the people within it. I'm your host, Paul Chapman. This podcast is produced by HC Group, a global search firm dedicated to the commodities sector. Today we discuss tungsten, vital for both military as well as industrial applications. Prices have shot up tenfold in the past year. Why and how do we get there and what does it mean for the world? Our guest is William Parry Jones, an authority on the global tungsten market and founder of Wolfram Advisory, a consultancy dedicated to tungsten as well as the broader critical mineral space, working to identify key opportunities for value creation with companies at different stages of maturity across the value chain, from upstream to downstream. Based out of London and William's had a career across tungsten, both in sales and sourcing, and prior to that was a metals trader. As always, you can really support the show by leaving us a positive review on the platform. You're listening on and I hope you enjoyed the episode. William, welcome to the show.
- [01:19]
B
Hi, Paul, how are you?
- [01:20]
A
Looking forward to this discussion. It's a bit of a return to form for the podcast. We haven't done sort of a deep dive 101 on a particular commodity for a couple of months. So I'm excited to do this. And it seems particularly apposite that we are doing this particular metal, which is tungsten, or as you've just let me know, wolfram, if you were in the early, early 19th century England, which, of course, well, you're about to tell us, has some significant uses, but particularly in the military context. And we're going to learn all about its supply chain and why prices have rocketed over the last couple of years. It's probably a story that's familiar to those who've listened to podcasts on other critical minerals and metals. But maybe, William, we can just start with tungsten itself. What is it? Where does it sit on the periodic table and why? Why has it got so many applications in today's society and what those applications are?
- [02:11]
B
Yeah, thanks for the intro, Paul. And I'm excited to be here to talk about this metal. It flies below the radar and it really shouldn't because it's absolutely critical to our everyday lives. So tungsten, atomic number 74, it's got the highest melting point of any metallic element on the periodic table. It's got a density similar to that of gold and roughly double that of lead. But most importantly, to its end use application in the world today is when combined with carbon to form a carbide. Tungsten carbide it has a hardness close to that of diamond. So you can probably tell from those unique properties that it's used to cut form machine other materials using that extreme hardness. It's used in applications where its density is very critical for balance weights for projectiles and the like, and where its high temperature properties are important and can be imparted to for instance, other alloys or as a coating on other materials. So in terms of its major use today, roughly 65% of tungsten demand by first use is as the carbide and then that goes into a myriad number of sub segments. And as you alluded to, it's an element that's absolutely critical for defense purposes. So you know, if you hark back to your school days, you might remember the equation F equals Ma force equals mass times acceleration. If you're looking to fire a projectile at somebody else, or you're looking to defend against a projectile, projectile fired by somebody else, that mass and that density is, is absolutely critical. That's, that's going to enable you to convey the, the most energy possible for a given, a given volume.
- [04:03]
A
Yeah, perfect. Literally flies below the radar in some of the. I couldn't let that go. So can you just give us, we're going to move on to the supply chain. Can you just give us some sense of volume and some sense of how that those applications are split between say, military uses just in, in warheads and projectiles and how much is used in industrial applications. And give again some sense of volume and scale here because as with all these metals, some of the challenges you need a lot when you need it. But actually compared to metals like copper and so forth, that you don't need that much.
- [04:38]
B
It's an absolute minnow in comparison to your base metals. So I'll just clarify before we talk about volumes. So in most other metals you talk about the elemental form copper, lead, aluminum. In tungsten, we talk about tungsten trioxide, W03. That's how it occurs in nature. That's how it's most commonly priced, is in per units of W03. So globally the market is about 156,000 tons of W03. That's roughly half the size of a market. For example, like tin, which is also a sort of strategic metal. So the largest segment by end use is mining and construction. So again, this hardness coming into play there, if you're wanting to drill holes into rock, if you're wanting to prepare surfaces, cut breeze blocks, whatever else you're going to want to use tungsten carbide in that application, the next largest segment at about 25% is in transport. And of that segment, the largest subsegment is light vehicles, so passenger cars. Then we have trucks and buses, civil aviation and other transport, that's marine and rail. Then we have this big segment and it's sort of 14% that encompasses what I would call general engineering or industrial. So we talked again about its importance in terms of its hardness and ability to process other materials. This is where you're doing the manufacturing of basically anything. Turning, tapping, milling, all of these operations, stamping, pressing, and then defense comes out down the bottom. I mean, it's a pretty small subsegment at about 11%. But the important discussion here is when we talk about these segments, we're talking about essentially the direct use. So if we talk about 11% of total tungsten demand, that's tungsten in a military application. What people don't seem to understand about the tungsten market in general is the indirect uses are myriad. So for example, in your tank you might have a shell or a projectile that physically is made from tungsten or a tungsten alloy. But that entire tank has had, have been manufactured. Right. The plates for the side have to have been cut, they have to have been welded. The turret itself has a ring gear that needs to be machined.
- [06:57]
A
Systemic metal in every process.
- [06:59]
B
Exactly, exactly that. So the way I like to describe it, it's an invisible industrial consumable. The demand is a proxy for global manufacturing activity rather than contributed to the bill of materials content. Right. The end use. You know, when you look around you in day to day, you're not looking at tungsten, but everything you're looking at has had tungsten involved. Its manufacture in some way.
- [07:21]
A
Does that mean. And we'll obviously come onto that, but it's probably to put a pin in it right now, just in general, but not talking about current market conditions, does that mean it's quite inelastic to price? You know, because it's so systemic and a sort of a sine qua non of industrial, you know, processes?
- [07:41]
B
Absolutely. On the demand side, it's never really been a particularly exciting metal, aside from generally around periods of global conflict, so World War I, to the Korean War, Vietnam and what we're seeing today, it's pretty much that the demand side has pretty much tracked GDP growth, you know, two, two and a half, something like that. Percent cagr. So it's definitely. Demand is definitely inelastic. Demand is not the exciting story here. It's supply.
- [08:09]
A
Yeah, right. Fantastic. I love This, I guess I love our 101s in these commodities. And it really brings it both how, how sort of invisible as you point out, but also critical these are to just ongoing industry and all of our daily lives and how things can go dramatically wrong from a policy standpoint, a planning standpoint, and from a, you know, a global trade standpoint. When things start to break both in, in decision making as well as in, in reality, we'll get to that story. But let's, let's set up the physical supply chain for us again, kind of absent current world events, you know, where is this stuff mined, how is it processed? What are the key sort of units that people consider and all that great stuff.
- [08:57]
B
Since the growth of the tungsten industry, which really happened around the back end of World War I, the 1920s, China has largely dominated supply, production and supply. That is because of its natural resources. So you know, the crustal abundance is pretty widely distributed. There is tungsten everywhere. Everywhere. But China has been blessed in terms of the grades and let's say the availability at surface.
- [09:23]
A
Oh wow, that's so that's quite a different. Well, sorry to jump in. That's quite a different to where typically China has imported the raw material and its processing capacity, its willingness to take on the dirty processing side, you know, has, has given it that capture. But this is a, an example where China has, has been endowed with a raw material which isn't usually the case.
- [09:44]
B
It's been endowed with the raw material. But most importantly, the government policy has been extremely supportive of the tungsten industry. So you know, to talk about its significance to the CCP here and its relative importance versus other critical minerals, you have to understand its role in the foundation of the party itself. So when Mao and Tudor established the Jiangsi Soviet, which was the precursor to the ccp, they actually established the Tungsten bureau so that they set this up in Jiangsi, which is commonly referred to as the tungsten capital of the world. And they nationalized the mines in Ganzhou and Diau and the whole of the southern belt of Jiangsi. And at its peak, the revenue from tungsten smuggled out of Jiangsi and sold to international traders in Guangdong and Hong Kong at the time represented nearly 70% of the CCP's non tax revenue. And it was critical in terms of its ability to buy vital military supplies and ensured the financial survival of the CCP during its early days.
- [10:43]
A
Oh, well, I'm, I'm reading Frank Dakota's books. Yeah.
- [10:48]
B
Oh, they're excellent.
- [10:49]
A
Yeah, yeah.
- [10:50]
B
Hard go hard going. Though, I mean you can spend. Yeah. A while reading them.
- [10:54]
A
Well, I say reading, I'm listening to them on audiobook. They've made that cue. But yeah, fantastic. And recommend those to listeners if you're interested in the history of China since the, the revolution. But anyway, sidetracked. Okay, so. So China's got it. What is, can you just tell us about what are you mining and what are you processing? Which stages is it stored at, shipped at and consumed at?
- [11:18]
B
Yeah, so it occurs generally in two forms in terms of mineralogy. It's a wolframite, which is an iron manganese based tungsten, or it's a shallite, which is a calcium based tungsten. And in the early days of commercialization of tungsten, wolframite was the favored ore for various reasons. And China initially exported this, Right? They exported it to the rest of the world for a long period of time. And it was only really in the 1980s under the opening up policy of Deng Xiaoping. And then later on that they decided to control the export of tungsten concentrates and actually push the exports further down the value chain. So to move into semi processed materials. And that sort of is a roundabout way of answering your question in terms of what forms are we trading today? The most commonly traded form of tungsten is in it, its intermediate chemical form, which is a chemical known as ammonium paratungstate. And in business we call that, we refer to it as apt. So that's a fine free flowing white powder with a tungsten trioxide content W03 content around 88.5%.
- [12:29]
A
Great. How do you get wolframite or shelite, if I'm getting that right? How do you actually process it? How, how expensive, how energetic is that processing? How environmentally destructive is that processing?
- [12:42]
B
Yeah, good question. So generally the processing routes are pretty similar with, with wolframites it's a little bit easier to process. So you're going generally via gravity concentration, whereas with she light you typically have to use flotation. And you're basically doing that, the standard mining and concentration flow sheet here. So you're crushing it, you're milling it and then you're either going via gravity flotation or a combination of the two to produce a concentrate that today ranges anywhere from sort of 50% W03, the high 60s. That concentrate is then generally refined via hydrometallurgical means. So that, that's chemical processing into this highly refined chemical intermediate called apt. Now is that energy intensive relative to other critical metals? Not really. You're using a lot of Sodium hydroxide in that process and you're using electricity and labor. But it's, it's not comparable to say, for example, alumin. That being said, the Chinese industry has been successful because they have co located these processing facilities in or around mining districts and mines themselves.
- [13:56]
C
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- [14:34]
A
is, is wolframite she light. Is it associated with other critical minerals or metals? Or are you specific? This is just tungsten only, you know, there's no fantastic sort of associations with other critical minerals that makes that mining process or the mine more more efficient and so forth.
- [14:51]
B
Yeah, so, so great question. And that's the origin of the word wolfram, which means wolf's froth. So it was originally recognized as a, as a mineral by people processing for tin and the, the tungsten damage the tin recovery in these processes. And they therefore said that the sort of, the wolf was, was pulling away the tin from the miners. So obviously it co occurs with tin in certain instances. It also co occurs with bismuth and molybdenum, particularly in China. And then there are a couple of polymetallic deposits outside of China. I mean one of them is, is in Vietnam which is, is a major mine today. And there is another in, in Myanmar which has metallurgy. That being said, polymetallic or byproduct tungsten is accounts for sort of less than 25% of global production today. Most of it is just occurring as wolframite or sheilite and nothing else.
- [15:55]
A
Yeah, okay, fantastic. So we've got this unit, apt. What is the unit of measurement for apt? And is that, is that what is stored and traded? And can you just talk a little bit about that, how that APT then is handed around the world to get to consumers?
- [16:13]
B
Yeah. So it's used as the unit of choice in terms of trading because it's the last step you can really go to in processing before you have to delineate and choose a particular form for a particular downstream application. So it's sort of a universal trading chip, if you will. The pricing is quite historic for sort of Legacy reasons but we talk about tungsten prices in terms of an mtu, a metric ton unit and specifically a metric ton unit of WO3 content. So a metric ton unit is 10 kg of WO3 contained within a product. So in the case of APT it's 10 kg of WO3 contained Within this chemical intermediate.
- [16:56]
A
Right. And depending on the concentration of that particular APT it might be a different amount or is it always sent, is always a standardized volume? By the time it gets to a tradable unit it.
- [17:06]
B
Nope. So the content in APT can fluctuate, although the standard is 88.5. And then you'll find that essentially the raw materials are the concentrate, the price is referenced off that APT index with a discount and then as you go further downstream from APT you transition into essentially 100% pure WO3, then 100% pure tungsten and basically those products are referencing the APT price plus a premium.
- [17:36]
A
Yeah. And then in terms of the actual trading of this, this is a physical back to back market with a, with a published index. There's no forwards of I assume, of course, you know how vibrantly is this traded or is it for the most part 90%, bilateral contracts and a little bit of spot. Can you just set that up for us a little bit?
- [17:57]
B
Yeah, we've moved quite rapidly. I mean even across my career we've moved from a market that had quite a large amount of liquidity in APT to one that has a very limited amount of liquidity. And that's all about basically the vertical integration and the M and A that's happened amongst industry participants but also the lack of mining projects outside of China that people can go and, or have been able to go and do deals with. So a lot of the volume and the liquidity that used to be there is now tied up under formula price contracts which are referenced off an index that is generally reported by one of four or five price reporting agencies. And yeah, essentially most of the market is transacted otc. In some cases you can do forwards but there's certainly no futures market or terminal market to deliver this into. I very much hope that one emerges given the, the current state of the market and the excitement around it and the investor interest. But let's see.
- [19:06]
A
Yeah, they typically are very, very challenging things to do. Out of interest, can you store APT or does it degrade over time? Can I just, can I buy a bunch and put it in my attic for a while given the story we're about to tell?
- [19:20]
B
I mean for all intents and purposes you can. This isn't like a soft commodity where it has an expiry date. You have to store it under certain conditions. It's particularly amenable to moisture, so it can agglomerate, but the tungsten value is still there within it. So, you know, it's not the most stable form of tungsten. There are better forms to store it in over long term, but you know, for all intents and purposes, it doesn't have an expiry date.
- [19:44]
A
Yeah. And is this just again, is this shipped on bulk containers? Is it containerized? Is it break. But I mean, how does, how do you, how do you move this stuff around?
- [19:52]
B
It's containerized. It's typically packaged in big bags or steel drums. And you know, the most commonly traded unit would be a 20, 20 metric ton, 20 foot container.
- [20:02]
A
Okay, right, get your wallets out, everyone. Let's tell the, let's tell the story. Okay. And perhaps we just put this in stark relief. Can you just tell us how the price, you know, has changed over the last decade? And this story of people. And it maps perfectly on to kind of the, you know, 15 years ago, you and I had this conversation the other day. You know, the world was ever more globalized, ever more stable. Everyone was friends and people were like, well, we don't need. The US got rid of its 30 years worth of strategic stocks of tungsten, given its obviously criticality in military applications and broader beyond, and today it basically has none. And at the same time the price has done what? And then can you I guess back that up with kind of the narrative as where we are. But yeah, can you just give us that stark price differential that we've seen?
- [20:51]
B
Yeah. So since February 2025, the price has increased by over 600%. And to give you some perspective on that, I would say that the prior 10 year trailing average was at or around $290 per metric ton unit. And today we're seeing spot prices at or around $2900 per metric ton unit. And you know, expanding on the thematic here, we've seen certainly historically a more balanced market in terms of supply, distribution. And China has moved towards control of this market and definitely has dominated since the early 2000s. And the catalyst for this price increase, back in February 2025, China's MOFCOM implemented export controls on pretty much all of the tungsten raw materials.
- [21:49]
A
Yeah. And a story played out in other stocks as well.
- [21:53]
B
Absolutely.
- [21:55]
A
Can you just give us some sense of how much of the APT production China controls? And, and in some senses as well, like you know, there's always this fascinating story about sort of the planning level at the policy level within Western governments or geopolitical rivals that this kind of was allowed to happen. But yeah, give us some sense of that, that chokehold that they currently have and the reaction of, of what that's meant within sort of the, the halls of government within the west as well as in the, in the commercial pools.
- [22:26]
B
Yeah, absolutely. So the, we won't talk about apt capacities here because it's not really a topic of refining capacity. There is refining capacity outside of China that is underutilized today. But the most commonly touted number, and you'll see this, there are hundreds of people posting it on LinkedIn every day. China controls 80% there or thereabouts of primary tungsten production. So that means mined tungsten production. And outside of China obviously there's a measly 20%. What that story doesn't tell is the success story of the secondary business outside of China. So for economic reasons, let me caveat, not for reasons of supply security, for economic reasons. The west has a very mature recycling industry and so scrap accounts for roughly another 45,000 tons of supply outside of China. Whereas within China there's. That secondary industry is relatively immature. So it's circa another 8,000 tons of W03 within China representing about 16% of supply.
- [23:37]
A
You've got that recycling bit and I guess we're sort of somewhat moving into responses but just before we get there, sorry, how when the market today is facing that, whatever I'm terrible when you're talking about that thousand percent price rise. I mean that is a, is that sort of, that doesn't seem, from the story you're telling necessarily one that wants to, that, that is purely a supply side driven and that's all in China's hands for the short term. What are we, you know, is the marketing kind of outright panic now and then let's move on to kind of what, what we're seeing as some of the solutions. And I was interested in that you said that this is a sort of, this is a, an or story, not a processing story, which again is somewhat different to some of these other critical minerals.
- [24:24]
B
Yeah, yeah.
- [24:25]
A
And how easy is it to go find some more ore and start, you know, opening up an old French mine or whatever it might be and utilizing that overcapacity in processing outside of China.
- [24:37]
B
So you know, one more factor in terms of supply and demand that we haven't addressed there in looking at ex China versus China is the fact that China can also buy the production that is outside of China, Whereas rest of world participants cannot buy the primary production that occurs within China. The export of tungsten concentrates from China is banned. And so what we saw in the years leading up, and I mean it was in some ways looking at it retrospectively, quite clearly signaled in the two years leading up to February 2025, we saw the Chinese get very aggressive and very active in taking primary production from the rest of world and bringing it into China. China so depriving the rest of world of even more supply. And to give you some context on that, so we talked about roughly 22,000 tons of W03 in primary production outside of China. About half of that occurs in Myanmar, Kazakhstan, North Korea and Russia. And so these markets aren't addressable.
- [25:40]
A
Friends of the West.
- [25:42]
B
Exactly. They more or less aren't addressable for rest of world. And then we have a nice chunk in the middle that is artisanal small scale production. So that's generally occurring in Central Africa, the Great Lakes region, some in Mongolia, some in South America, so Bolivia and Brazil. And that is what I would call contested production because essentially that's who brings the biggest suitcase of money. Right. And the Chinese are pretty aggressive in that regard. And then in terms of friendly nations or mechanized mines that western buyers can rely upon, it's a very, very limited pool. So it's Vietnam, Spain, Austria, Australia, Portugal and Brazil together of which account for less than 40% of that 22,000 thousand metric tons of ex China supply. So, you know, the picture is even worse in some ways than it looks at first glance, but it shows you how centralized and how well planned the move by China has been in regards to controlling access to this material.
- [26:41]
A
Yeah, which is a bit, I mean it's pretty impressive, but it's certainly bringing a gun to a knife fight. Right. Because the west is relying on free market economics and companies making the right economic choices, whereas presumably behind whatever entity in China were doing that buying is the, is the hand of the state and, and centralized policy, very smart as it was. Right. So it's, you know, there's somewhat of a, kind of a yes, of course, in hindsight, but not much you can do if you, if your, your, your country's economic activity is in the hands of private actors, which is, as we know, usually the best way to maintain freedom and, and growth and all the rest of it.
- [27:20]
D
Hello, I'm David Hunt, founder and managing director at Hyperion Search. Founded over a decade ago, Hyperion Search has helped organizations from major utilities to startups recruit Their leadership teams and key individual contributors to accelerate both their growth and the energy transition. Our three main verticals are renewable power, energy storage and E mobility. The energy transition and the talent that delivers it has been our passion since day one. To find out more, visit hyperionsearch.com or listen to my Leaders in Clean Tech podcast available on all platforms.
- [27:53]
A
Just before we get to kind of the ways out of this, what does that, you know, who actually controls that controllable tungsten supply chain and are we sort of seeing in terms of stock valuations that kind of the poor processes that have no primary material are plummeting and the few mining companies that have access to this or the startups are sort of of have become meme stocks. What's going on? Just in that when we sort of look at our portfolios and ways investors might want to look at tungsten.
- [28:21]
B
Yeah. So on the equity side, from let's say a refining and processing perspective, there aren't many. Most of them are privately owned or the largest are privately owned. So when we talk about equities, we're mainly talking about junior miners of which prior to midway through last year, I could point to a handful, three or four. And of course all of the juniors have come flooding into the market because tungsten's now an exciting space and it's a fantastic time to raise money. So now you're looking at probably 20 or 30 at my last count, junior mining stocks that are attracting investor interest.
- [29:05]
A
A couple of questions there. One would be that is essentially a bet on the world stake continues to be disrupted. Right. Because again we're not talk there's sufficient supply of tungsten. The market as you pointed out, the prices was relatively stable for 10 years. So that's a bet on the fact that current world conditions continue or at least that the US rebuilds its strategic reserves. I guess that's the ultimate bet there. How long does it, you know, is that a fair assessment? And then secondly, how long does it take to stand up a tungsten mine even if you've got processes ready to go?
- [29:40]
B
You've nailed it there. So it's a very risky investment thesis. Right. Because at any point China could turn around and say, okay well we're not restricting exports anymore. I'd like to believe that this has taught the rest of world buyers somewhat of a lesson and that they wouldn't immediately go rushing back to buying that supply. But ultimately if there's an economic incentive to, it will happen. So it's certainly a risky a thesis. I would imagine that it will survive until the end of the current administration at minimum and probably past that in terms of the increasing tensions, geopolitical tensions both between China and the US and other countries in terms of standing up supply. Yeah, it's no quicker than any other mining project. We've got a sort of split in terms of projects that have the potential to come on let's say in a three to five year period here between high grade, lower scale, lower resource, lower production and lower grade behemoths with 20, 30 year, 40 year mine lives in the very near term. So if we're looking at from today until maybe two or three years time, there are a few, a very limited few that can, can produce more through expansionary projects or through development. There are two new mines that are coming on stream this year and next that I'm aware of anyway, maybe two or three. But we're really looking at that three to five year time horizon before primary supply can come on to meet the demand deficit at the moment.
- [31:29]
A
Yeah. Where are these mines out of interest? There's not one in Cornwall is there?
- [31:34]
B
There's one in. So, but yeah, if we're talking about very near term it's the countries that we talked to before, so Vietnam, Australia, Spain, Portugal. If we're talking about three to five, then we're looking at other regions like Canada, North America, some others in Europe and certainly some more in Australia as well. And then if we're looking out past that five year time horizon, we've got some very, very big projects in Central Asia so in Kazakh, also in Uzbekistan that could potentially come on and then the, the darling of the, the equities markets at the moment. The. I'm not going to name names, you can, you can work it out for yourself. But they have a project in South Korea that is, is ramping up potentially this year and delivering supply next.
- [32:21]
A
Yeah, yeah. Okay. I was hoping that plucky little England would, would have been endowed with some, you know, lots of stuff but you
- [32:29]
B
know there's a, there's a mine in.
- [32:32]
A
Not that we mine it anyway.
- [32:33]
B
You know, it's now on its, it's on its third go around and you know, based on, on the team that's trying at this time, I think they will have every chance of success. But it's, you know what, you know what the, the government and the, the legislation is like in the UK that we're just not my. It's not a mining friendly jurisdiction and it's certainly not a, especially not a cost, especially a cost friendly jurisdiction.
- [32:57]
A
Not in, not in my backyard estate, not in my Dutchy is the around those areas. Anyway. Okay, so, so we, you know, we've heard some of the responses there. Right. Which is obviously let free market economics do it. And people, you know, obviously junior miners, risky world. Right. But great payoff. You know, so you've, you've, you've. The market is doing what the market's doing and, but there is still a time horizon there, you know, actually three to five years. I'm sure this is still going to be a probably problem and we are going to see I think globally a weather eye on, on, on strategic stocks of all of these metals in, in sort of the major, major regions if you'd like so that we don't kind of end, end up back in this, this state you've mentioned recycling. You know, is, is, is that sort of the, are we, are we seeing the typical response or is, is tungsten, given its nature, you know, causing more consternation than others at the governmental level as we sit here today with the price as it is, kind of what are the biggest noises apart from sort of meme stocks and LinkedIn sort of, you know, diagrams.
- [34:08]
B
Yeah. So the, the, the industries making the biggest noise, and they may not be the industries consuming the most tungsten, but making the biggest noise are defense and energy. So defense we've talked about energy. You're looking at downhole tool and various other applications in oil and gas. And certainly I think there, there is a push from government towards perhaps an MP material style deal where there's equity involvement from the US government or other governments in tungsten mines outside of China or perhaps some sort of price support or perhaps some sort of guaranteed offtake that then ends up being bankable for these projects, either direct consumers or to replenishing strategic stockpiles. So you and I talked about this before the call. I don't think we've talked about it on this podcast. But the US alone had a strategic stockpile through the 60s, 1780s that was well over three years of US domestic consumption combined. And it took the decision in the 90s and 2000s to sell that all off. And it's a similar story in Europe. I mean a similar thing happened, happened in Russia. We don't really want to talk about Russia. And literally the only country that has continued to maintain its reserves and in fact increased them in the last couple of years is China. So I think there's every potential and I think that's government. Government's focus is not only how do we get ourselves out of this crisis in the next two years, but how do we make sure that it doesn't happen again within our lifetime?
- [35:51]
A
Yeah, and the other group that we haven't spoken about, which is the central community of this podcast, is the Trade Traders. There are one or two trading houses, Traxxas for example, that, you know, significant in this space. You know, how have they fared? Has this been an absolutely fantastic time to have a be solving problems in time, space and form in tungsten? Or has it also had some casualties on the way given the volatility?
- [36:17]
B
So the, the trading involvement in the west anyway, or the rest of world has, has been quite limited over the last 10 to 15 years. Some of the stalwarts have space predominantly because there wasn't the liquidity there. But today, I mean, there are three names that are associated with the Project Vault in the US, which is the notional $12 billion stockpiling initiative for critical minerals that's expected to include tungsten. That would be Traxxas, Mercuria and Hartree. Traxxas certainly have the largest tungsten book that I'm aware of, again outside of China today. And the others are looking to make moves in that space. You know, this metal was heavily traded back in the 60s and 70s, so there's a great story. There was a gentleman by the name of Simon Hicks, working for a UK firm, Metal Traders Ltd. Which was competing with the likes of Philip Brothers in the tungsten market at the time. And back in the 60s, China was selling the bulk of its tungsten concentrate exports at the Canton Fair, right. So this was happening once a year. So Hicks identified this as the golden opportunity to push the market down, down prior to the fair and then bullied up after the fair. And for a long period they made a lot of money doing that. It was set in the market to be a waste of time doing supply and demand analysis. All you needed to know was whether Hicks was buying or selling. And that market manipulation and depth in liquidity sort of came to an end in the 70s and 80s and Metal Traders Limited ended up going bankrupt because the Chinese offers of tungsten became so low large that the level of volatility of prices got too much for the company to handle. And after that there was various attempts at international controls, pricing indexes, pricing controls, cartels. And we've eventually come to the world that we see today, where as I said, for the last decade, really limited liquidity in the space, certainly in the primary and intermediate space, and now that's starting to get exciting again for the trading houses. So they're coming back, back in. One thing to talk about there as well. I mean I'm really talking about primary so mined material and intermediates trading. There is a whole industry in and around the trading of scrap. And there are some big names there. Tunko Chronomet, the two largest that I can think of, Staadler, Matala. And it's a market that's far more amenable to trading and, and speculation than at the moment, the primary and intermediate space.
- [38:57]
A
Yeah. God, I feel like we're just scratching the surface and coming towards the end of our time. I mean that definitely sounds like there's a book in you to write about the history of tungsten trading. Do we know what happened to Mr. Hicks?
- [39:12]
B
Supposedly he gave it another two goes and he made back his fortune at some point.
- [39:17]
A
Fantastic. Well, good on, good on him. And I'm sure he'd, I'm sure he said it was all fair in, in love and war when it comes to how you, how you move markets back in the 60s and 70s. Right. And probably not much different now, but okay, so it'd be great. You know, obviously Wolfram Advisory, your firm, you've gone, you've been trading in the market yourself and, and based in Hanoi for seven years, you're now back in London and advisory advising clients around the world kind of, I mean, what types of clients are you advising and kind of what are the critical questions that you're fielding?
- [39:52]
B
Yeah, so I spent the early part of my career in physical trading and that definitely had a tungsten focus. And then I moved over to the mining side. So I lived in Vietnam working for one of the largest non Chinese tungsten producers on the commercial side for six and a half years. Moved back to the UK and set up in consulting right around the time that this market exploded. And so, you know, I've been working with predominantly junior miners and that's multifaceted, it's commercial excellence, but it's also looking at supply and demand and market timing. And I've also been fielding calls from the midstream as well. So you've got lots of companies that are struggling to understand how the world has changed and how they can benefit within that. And then another facet of the business at the moment is working with institutional investors, high net worth individuals to try and understand the mining side of it, the equity space as well.
- [40:53]
A
Fantastic. And where can, and how can people contact you? I can put links to your company in the show notes, but people just reach out on LinkedIn or how do they get hold of you?
- [41:02]
B
Yeah, LinkedIn, my email address williamolframadvisory.com or drop me a, drop me a message on LinkedIn.
- [41:10]
A
Perfect. Well, let's, let's agree because I find this fascinating to have you back in, in a couple of years and, and see where we're at because you know, I think there's, it's a fascinating story in and of itself but I think it's also emblematic of, you know, of, of the broader story of de globalization and given its use in military hardware, it, you know, let's all hope the price goes to down a little bit, you know, given what's going on at the moment. But you know, the world is talking about rebuilding stocks, rebuilding of weapons, rebuilding stocks of strategic supplies and you know, tungsten sits at the very heart of that.
- [41:45]
B
Absolutely. Thank you very much for having me on. Really enjoyed my time.
- [41:55]
A
Thank you for listening. To find out more about HC GRID Group, our global offices and our expertise in search within the commodities sector, please visit www.hcgroup.global.