The term "carbide" often refers to Tungsten Carbide (WC) used in hard metals or Silicon Carbide (SiC). The recent price surges are typically driven by a combination of structural and cyclical factors.

I. Reasons for the Surge in Tungsten Carbide (Hard Metal) Prices

Tungsten carbide is the primary material for hard metals, used in cutting tools, mining, defense, etc.

1. Tight Supply of Key Raw Material (Tungsten)

  · Strategic Resource: Global tungsten supply is highly concentrated. China holds over 60% of reserves and produces about 80% of the world's supply. Stricter environmental policies and mine consolidation in China have constrained output.

  · Geopolitical Factors: Conflicts (e.g., Russia-Ukraine war) disrupt supply chains from Russia and Kazakhstan, intensifying global shortages.

  · Export Controls: Some countries impose restrictions on critical mineral exports, pushing prices higher.

2. Energy Costs & Production Constraints

  · Tungsten carbide production requires high-temperature processing (1400°C–2000°C), making energy a major cost component. Soaring global energy prices (natural gas, electricity) have raised production costs significantly.

  · China's "dual-control" energy consumption policies have limited output in high-energy-consuming industries, including tungsten carbide.

3. Strong Demand Growth

  · Manufacturing Recovery: Global recovery in machinery, automotive, and aerospace industries boosts demand for hard metal tools.

  · Mining Activity: Rising commodity prices stimulate mining, increasing demand for drill bits and wear-resistant parts.

  · Emerging Industries: Growth in photovoltaic and semiconductor sectors drives demand for tungsten carbide grinding tools.

4. Supply Chain & Inventory Issues

  · Post-pandemic logistics disruptions and higher freight costs.

  · Hoarding by intermediaries and low secondary supply due to underdeveloped recycling systems.

II. Reasons for the Surge in Silicon Carbide (SiC) Prices

Silicon carbide, a key third-generation semiconductor material, has seen explosive demand from green energy and tech sectors.

1. Semiconductor Demand Boom

  · Electric Vehicles & Renewable Energy: SiC power devices are critical for EV powertrains and charging infrastructure, improving efficiency. Adoption by Tesla and other automakers has led to exponential demand growth.

  · Photovoltaic Inverters: SiC devices enhance solar inverter efficiency, benefiting from rapid global PV installation growth.

2. Technical Barriers & Capacity Shortages

  · SiC crystal growth is difficult (low yield, long production cycles). Global capacity is dominated by a few players (e.g., Wolfspeed, Infineon), and expansion lags behind demand.

  · Substrates account for over 50% of SiC device costs, creating a supply bottleneck.

3. Geopolitics & Trade Restrictions

  · SiC is classified as a strategic material in several countries, leading to export controls and technology transfer restrictions.

4. Investment & Speculation

  · Capital inflow into the SiC sector, coupled with stockpiling and long-term supply agreements, exacerbates spot market shortages.

III. Other Carbides (e.g., Boron Carbide)

If referring to Boron Carbide (B₄C), price increases are driven by:

· Defense Demand: B₄C is essential for lightweight body armor. Geopolitical conflicts have spurred military procurement.

· Nuclear Industry: Used as a neutron absorber in nuclear reactors.

Summary: Why the "Sudden" Price Spike?

1. Unexpected Shocks: Geopolitical conflicts, energy crises, and sudden policy changes (e.g., production curbs in China).

2. Structural Demand Shift: Rapid growth from EVs, renewables, and semiconductors outpacing supply chain capacity.

3. Speculation & Inventory Buildup: Hoarding in the supply chain triggers panic buying.

4. Long Lead Times for Capacity Expansion: Expanding carbide production (e.g., SiC substrates) takes 2–3 years, preventing quick supply responses.

Outlook

· Tungsten Carbide: Prices will remain sensitive to tungsten supply and energy costs. A slowdown in global manufacturing or advances in recycling could ease pressure.

· Silicon Carbide: Prices may moderate in the long term (2024–2025) as new capacity comes online, but shortages are likely to persist in the near term.

Key factors to watch: Policy changes in major producing countries (e.g., China's tungsten export quotas), capacity expansion timelines of leading manufacturers, and demand trends in electric vehicles and renewable energy.