Carbide Cutting Tools News & Views

For over a year now the price of metals used in the production of carbide cutting tools has continued to rise, in June this year the price started to drop off and many breathed a sigh of relief however this was short lived as in July it had reached the bottom and most of the decline was wiped out by the end of August.

Prices for tungsten APT（Ammonium Para-Tungstate）the main material used in the production of carbide made a high of $470/mtu in June from a price of $350/mtu in March, today it is trading at ~$460/mtu, from February 2009 – February  2010 tungsten APT was trading for under $200/mtu with a low of $170/mtu, since February 2010 prices started to rise with little resistance.

So why has the price of carbide and some other minor metals managed to reach such highs?

Back in the 90’s China was exporting many minor metals at a much lower cost than could be sourced elsewhere so mines started to be mothballed and exploration came to a halt. Today China’s economy is booming and the demand for these materials in China’s home market has rocketed creating a shortage of supply. Prices have now risen past the point where it is economical to mine elsewhere but as you well know you can’t just re-open a mine it often takes more than a year to bring it from a state of care and maintenance to a fully producing plant so it could be a few years before prices stabilize.

So how does this effect the price of carbide cutting tools and other products made from carbide?

Well that depends on the individual product and the technology used in the manufacture of individual items, an item which is pressed to a low tolerance, sintered and washed to make a finished product will be more sensitive to the fluctuation in the cost of raw materials than say indexable carbide inserts, a good example would be indexable carbide inserts for parting or grooving which use relatively low amounts of carbide compared to the cost of the finished product and rely on advanced pressing techniques and use high quality coatings. Also products which require a lot of grinding during the manufacturing process will also be less affected by the cost of raw materials, fully ground threading inserts and form tools are typical examples others include solid carbide milling cutters and end mills.

Most manufactures have already passed on the increased cost of their products to their customers others will have to increase prices soon. The price increases I’ve seen this year for carbide inserts vary from 5%-30% that’s on top of increases of  8%-14% in 2010.