On the demand side, FY2025 marked a turning point as new energy and high-tech applications added significant incremental volumes to traditional markets. Tungsten wire for photovoltaic wafer cutting saw penetration rates rise to 40% globally, doubling yearon-year, while use in lithium-ion batteries increased by over 20%. Defence demand also surged, with tungsten’s critical role in armour-piercing munitions, aerospace components, and next-generation aircraft securing long-term procurement contracts in the U.S. and Europe. Analysts now forecast global tungsten demand to exceed 130,000 tonnes of concentrate in 2025, a 6% year-on-year increase. Market Behaviour and Pricing Trends Throughout FY2025, tungsten prices tracked this evolving “perfect storm” of tighter supply and surging demand. After stabilising around A$490–520/mtu in Q1FY2025, prices began a steady climb through Q2 and Q3 before accelerating sharply in Q4FY2025 as Chinese controls tightened and stockpiling intensified. In parallel, ferrotungsten (FeW) prices outperformed concentrate, increasing by nearly 19% in USD terms over 18 months, reflecting robust demand from the global steel industry and the decoupling of FeW from APT price cycles. The broader tungsten product chain also saw record highs by August 2025: − Tungsten powder reached ~A$96,000/t. − Concentrate peaked at ~A$43,200/t − APT prices exceeded A$64,000/t, and APT quotes rose above A$68,000/t in Europe, This narrow gap with the aforementioned Chinese price indicates that both the western and Chinese markets are experiencing tight supply. One might have expected that the export restrictions would free up more material for the domestic market in China, but this does not seem to be the case, as evidenced by the similarly high prices. Shift Toward Long-Term Contracts A defining feature of FY2025 was the transition away from spot-market trading toward long-term, relationship-based contracts. Western buyers, wary of China’s export-licence regime, increasingly sought multi-year agreements with secure suppliers such as EQR. In Q3 FY2025, EQR signed five new offtake contracts worth an estimated US$124 million (≈A$190 million) over 24 months, each including prepayment provisions to mitigate licence-timing risks. These contracts diversified sales across Europe, North America, and Asia, providing greater revenue visibility and underpinning investment in EQR’s operations. This trend is consistent with broader industry dynamics, where downstream manufacturers are prepared to pay premiums to secure non-Chinese supply. For producers, these contracts reduce exposure to policy shocks and volatile spot prices, while requiring greater workingcapital commitments to manage larger inventories. FY2025 Market Outcome and Outlook By the close of the financial year, the tungsten market was characterised by: − Strong price appreciation: APT up 37% year-onyear, from US$338/mtu to US$463/mtu, (A$506/ mtu to A$712/mtu) with FeW premiums sustained. − Geopolitical reshaping of trade: China’s export controls and stockpiling strategy contrasted with Western efforts to secure supply independence. − Structural supply deficits: Declining Chinese grades and limited new mine output kept the market tight. − Emerging demand growth: Photovoltaics, energy storage, defence, and semiconductors added new layers of consumption. − Strategic contracting: Western buyers locked in supply with multi-year agreements, providing stability for producers. 480 530 580 630 680 730 320 340 360 380 400 420 440 460 480 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 12 months - APT Mid Price (CIF EU/US) $US & $AU US$ AU$ Figure above: 12 months history APT Mid Price. Source: Fastmarkets. Tungsten APT 88.5% WO3 min cif Rotterdam and Baltimore duty-free, $/mtu WO3 Looking forward, analysts expect tungsten prices to remain elevated and volatile over the medium term. Structural drivers — including resource scarcity, sustained defence restocking, and growth in high-tech applications — support a long-term upward trajectory. Risks remain in the form of global economic slowdown, potential substitution technologies, and speculative volatility, but the strategic value of tungsten is now firmly entrenched. Operating and Financial Review continued APT Mid Price (SUS/mtu) APT Mid Price ($AU/mtu) 12 EQ Resources Limited Annual Report 2025
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