YUAN DEVALUED: Chinese currency devaluation just one more thing to worry about for APT market

The news that the Chinese central bank has devalued the renminbi, pushing it down 2% against the dollar, could eventually have an impact on the ammonium paratungstate (APT) market, sources have said – but there are other influencing factors that may be more pressing.

Market participants agreed that, notionally at least, the devaluation of the currency could encourage increased exports of APT into Europe – the idea being that it would be possible to sell at the same price or higher in RMB, while pushing down the dollar price. China is already a major supplier of tungsten to Europe, and without a corresponding surge in demand, any increase in availability is likely to have a negative impact on the price. Spot demand has been patchy in Europe for much of 2015 - even before the advent of the traditional summer lull - and hopes are not high for a rebound. Hypothetically, it will now be easier for Chinese exporters to compete internationally, as they will be able to undercut other sellers, creating further pressure, according to one trader. Indeed, some participants are adamant that prices will fall as a result of the devaluation. “It is too early to...

Published

Claire Hack

August 13, 2015

01:22 GMT

New York