Untapped value

Tungco, Madisonville, Kentucky, has positioned itself as one of the largest tungsten carbide recyclers in the world since its founding in 1969.

The company was founded when current Chairman Steve Nance began recovering tungsten carbide from mine drill bits. His father, James, sold machinery to coal mines and asked Steve if he’d like to make some money for college. He started recovering tungsten carbide tips using a small coal-fired furnace in a barn, driving as far as Texas to sell the recovered tungsten.

Tungco has since branched out into other areas, including its alloys-based business, 74 Alloys, which focuses on high-speed steel, heavy alloys, cobalt and other related scrap. After 50 years in business, the company says it truly has positioned itself as an expert in a sector of scrap recycling that has managed to fly under the radar.

“Everybody recycles aluminum—you can take your cans anywhere,” Chief Sales Officer Ryan Sizemore says. “When is the last time you heard somebody taking tungsten somewhere? It just doesn’t happen.”

While tungsten is listed on critical mineral lists in the United States, Canada and Europe, the U.S. Geological Survey’s “Mineral Commodity Summaries 2022” reports that zero metric tons are produced in the U.S., while the amount of the metal in reserve is not available.

Without disclosing exact figures, Tungco says it is the largest shipper of tungsten scrap per month globally, but because tungsten is what Sizemore calls a “niche metal,” collecting the material presents plenty of challenges, including diversity of supply streams and a dynamic supplier base.

Tungco Chief Supply Chain Officer Amy Herron says that while scrap yards have piles of other metals, when asked about tungsten, an operator typically will escort you to a back room “because they don’t get a lot, but they know the intrinsic value of that material.”

“When you go to a scrap yard, the tungsten is in a coffee can,” Sizemore says, with Herron adding, “And that coffee can is safe somewhere in a locked area.”

She continues, “Most people don’t understand what it’s for, but they know it’s something they don’t see on the regular. It’s not something you’ll just find piled high in a scrap yard.”

The state of the market

China largely drives the global tungsten market. The country reportedly has about 75 percent of the world’s supply and, according to Toronto-based tungsten turnaround investor-operator Almonty Industries, increased regulations and restrictions on exports of tungsten ore and growing domestic demand have driven China’s market position.

Almonty says global demand for tungsten is forecast to rise annually by 3 percent to 7 percent and is predicted to outstrip available supply, placing upward pressure on prices in the near term.

Given that China is the primary supplier and the critical nature of the metal, it’s no surprise that recycled material is of growing importance.

“Recycling has become as important or maybe more important than getting ore out of the ground,” Sizemore says.

“Most of our customers have made plans by 2030 to be 90 or even 100 percent running their plants on recycled material,” he adds. “So that’s put a lot of pressure on getting the tungsten that’s used globally back into the loop to recycle it.”

Herron says tungsten smelting operations require various inputs, and scrap is an input that has been growing in popularity for many reasons, including increasing emphasis on environmental, social and governance reporting.

“That is adding a lot of pressure in addition to sustainability within our environment globally,” she says. “While that pressure is a global pressure, it has not escaped the U.S. The initiative seems to grow on minimizing other inputs and maximizing scrap percentages.”

Primary material is so unstable, Herron says, that tungsten recycling now is referred to as “the new primary.”

“We expect that demand to only increase,” she says, adding that while demand for Tungco’s customers’ products might not be increasing, “our demand is positioned to increase because of this slice of that recycling pie that is getting larger and larger.”

Tungco has experienced demand for recycled-tungsten units that is far outpacing supply, largely because Herron says the company depends on others to collect it. “It’s a tricky space to be in.”

Push toward recycling

The tungsten recycling rate largely is influenced by its use in tungsten carbide, representing about two-thirds of global use. According to a 2021 report from the International Journal of Refractory Metals and Hard Materials, the estimate for the current overall global recycling rate of tungsten carbide products is 46 percent.

Overall, however, the report says the end-of-life flows for tungsten are more complex. In 2016, 98,000 tons of tungsten went into end-use products with an end-of-life recycling rate of 30 percent, totaling 29,000 tons of scrap recycled and 67,000 tons assigned to “loss.”

The report notes recycling can be split into three groups: direct recycling, chemical recycling and melting metallurgy.

Direct recycling transforms the as-supplied material to powder of the same composition, while chemical recycling converts scrap to a virgin-like equivalent, using more energy in the process as the scrap can often be contaminated.

Herron says the lack of visibility into the value of tungsten recycling partly is because of a lack of a pricing index. Pricing is available for tungsten concentrate, but Sizemore says the price is volatile.

“It could be one price today and a drastically different price tomorrow, and that could be up or down based on the end users’ demand requirements and the tolerance on positioning pricewise,” Herron says. “It’s really volatile; it’s probably the most volatile thing we deal with.”

Roskill Information Services, which was acquired in the summer of 2021 by London-based Wood Mackenzie, released a report that year titled “The Roskill View: Technology Metals,” which says output cuts and suspensions in China could drive prices higher.

According to metallurgical consultancy 911 Metallurgist, based in Canada, because of its industrial importance, moderate unit value and strategic significance, tungsten carbides have become an important recycled material.

Primary uses

Herron refers to tungsten as one of the more unfamiliar areas of scrap metal recycling. Similar to scrap yard operators who collect tungsten in coffee cans in their back rooms, few people know exactly what to do with it.

Tungsten has the highest melting point of all metals and often is alloyed with carbon—forming tungsten carbide—to increase strength. It’s used in high-strength and high-temperature applications, such as furnaces, missiles, dental drills and other cutting tools.

End-of-life tungsten carbide scrap can include rotary cutter scrap, drill bit scrap and worn carbide burrs, while production scrap can include grinding sludge powder and steel roll scrap.

A metal drill bit, for example, can be recycled to extract tungsten and cobalt, and the resulting tungsten oxide can be converted into tungsten metal powder used to produce a heavy-metal alloy for counterweights in airplanes.

The International Tungsten Industry Association (ITIA), London, analyzed end-use segments for global tungsten consumption in 2016 and found that transport makes up one-third of consumption, making it the single-biggest segment. Mining and construction totaled 21 percent of uses, industrial was 11 percent and energy was 10 percent.

Tungsten recyclers face similar challenges as the rest of the industry when it comes to increased costs and labor shortages, but the global political climate also is something tungsten recyclers pay close attention to as the material widely is used in military applications, with the ITIA reporting the defense sector makes up 8 percent of tungsten end use.

Sizemore says the aerospace industry has changed requirements for new aircrafts and notes Boeing has tungsten orders in for the next 10 years.

Because tungsten widely is used in manufacturing, the industry is somewhat protected from certain economic effects.

Maintaining relationships

The recycling industry often is predicated on relationships, but the nature of tungsten recycling and the market volatility make those relationships more critical. Because volumes vary so wildly from supplier to supplier, maintaining positive relationships with everyone—regardless of volume—is critical to business success.

“We respect volumes, but they don’t rate any higher in the value of that person or that business,” Herron says. “They’re doing everything they can to fill the coffee can, and they want to bring that in. There’s a lot of value to that. ... We pride ourselves on being customer- and supplier-obsessed.”

“We treat a guy that sells us 50 pounds the same way we treat a guy that sells us 50,000 pounds,” Sizemore adds. “It’s not different if you have a coffee can or a truckload.”

The author is managing editor of Recycling Today and can be reached at mmcnees@gie.net.