Tungsten Carbide Market Mess

The Carbide Industry is in a Huge Mess

Supply is very low, prices are very high, choices in sizes and shapes have been much reduced and delivery is all too often uncertain.

A big part of this is the Chinese. The Chinese own most of the world’s supply of tungsten. They used to sell ore, then they sold refined material and now they sell finished tools. They have also been increasing the price over the years. As the price goes up it makes it harder and harder to keep inventory. This is especially true with slow-moving items.

In the saw tip industry we had a company, called Ceratizit, whose marketing strategy for years was to dominate the industry through low prices, high quality and great service. Because Ceratizit was so aggressive in the saw tip industry other carbide companies focused on areas where there was less competition and more profit.  Then the huge increase in raw materials and the long, deep depression in housing caught up with the saw tip market. (We may be in a recession in the overall economy but we are definitely in a depression in the housing market and related construction.)

As prices escalated and the market shrank Ceratizit, along with other carbide suppliers such as Kennametal, consolidated plants.  Combining plants is something that no intelligent manager does lightly. They cause a huge disruption both in the organization and in the customer base.

To cope with this we have several times the largest inventory in house we have ever had.  We have had to do this because we just can’t count on delivery. We keep certain sizes and grades on the shelf for particular customers.  We order well in advance for replenishment to make sure we have them.  Now we are finding that a promised 4 to 6 week delivery may be three months. In the meantime we have to go to a more expensive supplier and order from them just to get the parts for our customer.  The customer is not happy because the parts are late.  We have ordered twice as many parts as we need.  We pay more for the parts and we thought we would have to.  We sold the parts to the customer at the price we promised. So the whole thing is a lot of work and expense and no one’s happy.

It has gotten so bad that we are using a list of 26 carbide suppliers to try and fill our customers’ demands on time and at a good price.   We seem to be doing better than most judging by customer comments and our increase in sales.  However the labor commitment is huge so our transaction expense is high.

At the bottom is a link to an article. Anthony DeHart has suggested it. The article talks about things easing in the raw material inside of the industry between 2013 and 2015. However that raw material still has to be refined and manufactured into saw tips, router bits, rods, etc.

There is one final, huge problem in the saw tip industry. There is one company that treats tungsten carbide to improve the brazing qualities. As I write this the company is a couple months out on delivery and seems to be having problems meeting those extended terms. In addition, they seem to be pushing their process and we think we are seeing quality issues.  This means we wait a long time for the carbide and then it won’t braze to the tool successfully.  This is every bit as big a problem as it sounds like. It is made worse by the fact that some of these are our exclusive grades and there is simply no replacement that delivers the same performance.

We currently sell 126 different grades of carbide on a regular basis.   None of them are identical in terms of hardness, toughness and density.

What you can do:

Here are some suggestions from Johan Holm.  If you have problems getting what you want when you want it he suggests that you consider the following.

  1. Accept later delivery
  2. Different grade of the same product.
  3. Larger size of the same product.
  4. Other style.
  5. Metric size instead of inch size.

Note: Johan Holm was in the saw tip industry for many years and had many hundreds if not thousands of friends. He is now working in the tool industry, is very happy and still loves talking about his family and his dog.

Anthony DeHart recommended this:


We sell carbide


800 346-8274


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