A steep downturn in consumer spot demand and geopolitical turmoil dragged European tungsten prices to a near three-year low, with the premium to the Chinese market narrowing, despite the Yuan’s depreciation this month.

European prices for ammonium paratungstate (APT) dropped below $200/mtu for the first time since mid-February 2017 and to their lowest since October 2016, Argus data shows.

Average European APT prices’ premium to Chinese export prices have narrowed sharply to just $1.10/mtu this month, in from $27.20/mtu in July.

The impact of scant spot demand in Europe from the automotive and cemented carbide sectors was further highlighted by the narrowing of the Europe-Chinese spread at a time when the yuan had fallen to an 11-year low against the US dollar, with major Chinese producers planning to reduce production to limit losses.