Tungsten Industry Analysis in the First Three Quarters in 2021

tungsten Industry Analysis in the First Three Quarters in 2021

Abstract: Since August, domestic tungsten prices have dropped slightly as a whole, and the market has a strong wait-and-see sentiment. Tungsten prices will show a weak and stable market.

Jiangxi Tungsten Group's national standard grade one wolframite concentrate (65%) was quoted at 113,500 yuan/ton in the second half of August, which was the same as the quotation in the first half of the month; the quotation in the first half of September was 110,000 yuan/ ton, down by 3,500 yuan/Ton.

Xiamen Tungsten's ammonium paratungstate (APT) quoted price of 167,000 yuan/ton in the second half of August, down 2,000 yuan/ton; in the first half of September, it quoted 163,000 yuan/ton, down 4,000 yuan/ton.

In September, Ganzhou Tungsten Association lowered the quotation of ammonium paratungstate (APT) by 5,000 yuan/ton, lowered the quotation of tungsten concentrate by 3500 yuan/standard ton, and lowered the quotation of medium-particle tungsten powder by 7 yuan/kg.

From January to July, China produced 76,900 tons of tungsten concentrate, a year-on-year increase of 3.96%; of which, the production in July was 1.02 tons, a year-on-year decrease of 12.04%. From January to July, my country produced a total of 73,600 tons of APT, a year-on-year increase of 66.37%. Among them, July produced 12,300 tons, a year-on-year increase of 90.37%; produced 5175 tons of ferro-tungsten, a year-on-year increase of 33.10%, of which July produced 795. Tons, a year-on-year decrease of 0.63%. From January to July, China consumed 115,000 tons of tungsten concentrate.

From January to July, China exported 13,300 tons of tungsten products, a year-on-year increase of 40.24%; among them, China exported 2365 tons of tungsten products in July, a year-on-year increase of 169.67%. From January to July, my country imported a total of 3888.4 tons of tungsten products, a year-on-year increase of 78.3%; among them, the import in July was 459.5 tons, a year-on-year decrease of 12.07%.

(1) Domestic:

According to the "National Cemented Carbide Industry Statistics Summary for the First Half of 2021", in the first half of this year, against the background of the steady recovery of the global economy, the domestic tungsten market demand continued to rise. The cemented carbide industry showed three characteristics as a whole: First, the cemented carbide industry Production rebounded, up 38% year-on-year; second, the export volume of cemented carbide products increased, up 8% year-on-year; third, the economic benefits of cemented carbide companies generally improved, and sales profit margins continued to increase.

On August 26, China Tungsten High-tech released a semi-annual report. In the first half of the year, operating income was 6.23 billion yuan, a year-on-year increase of 41.88%; net profit attributable to shareholders of listed companies was 193 million yuan, a year-on-year increase of 82.1%. In terms of mines, Shizhuyuan’s accumulated tungsten concentrate equivalent volume in the first half of the year was 57.13% of the annual plan and 107.15% of the same period last year. The economic benefit exceeded the planned schedule and the same period last year, setting a new record high. In terms of smelting, Chenzhou Diamond Tungsten Products Co., Ltd. realized capacity tapping and efficiency improvement through technological innovation. The self-produced APT increased by 1,200 tons year-on-year, the highest level in history since the establishment of the factory, and the processing cost decreased by 14% year-on-year, setting a record low; Cemented carbide's warehousing output, order quantity, and shipment volume increased by 40.52%, 67%, and 45% year-on-year respectively, all of which set the best results in history; the operating income and total profit of Zhuhai Drilling Company reached the best level in history; The cemented carbide, tungsten and molybdenum products, hard surface materials, tools and service sectors of the self-hardening company increased by 30%, 22.6%, 34.5%, and 13.3% respectively year-on-year; the powder output of the company increased by 24% year-on-year, and the alloy bar was in 4- In May, warehousing reached a record high for two consecutive months, and the cumulative output of PCB milling cutters increased by 29.5% year-on-year.

On August 26, Xiamen Tungsten Industry released a semi-annual report. In the first half of the year, the company's tungsten and molybdenum and other non-ferrous metals business achieved operating income of 5.121 billion yuan, a year-on-year increase of 49.54%, and realized a total profit of 800 million yuan, a year-on-year increase of 96.75%. In terms of mines, due to the rise in tungsten concentrate prices, the total profit increased year-on-year; in terms of smelting, the total profit of tungsten smelted products declined slightly year-on-year due to the increase in the price of raw materials; in terms of alloys, the sales volume and total profit of cemented carbide bars increased year-on-year; overall; The profitability of cutting tool products has been improved due to the increase in unit price; the sales volume of indexable inserts (ie "CNC blades") has increased significantly year-on-year, benefiting from the optimization of product structure and the increase in product unit prices, the profitability has increased significantly; the production and sales of rough blades and wear-resistant materials steady improvement, with a substantial year-on-year increase in total profit; the quality of rock drilling tools has improved, and product sales have increased; the profitability of top hammers, engineering tools, and hard-surface materials has continued to improve.

On August 17, Hunan Gold released a semi-annual report. In the first half of the year, the company produced a total of 707 standard tons of tungsten products, which was a decrease of 37.93% year-on-year due to insufficient raw materials purchased. Among them, tungsten concentrates produced 889 standard tons of tungsten, a year-on-year decrease of 21.81%. Sales revenue of tungsten products was 85,395,600 yuan, a year-on-year decrease of 29.35%, mainly due to the decrease in sales; accounting for 0.99% of operating revenue, a decrease of 0.61 percentage points from the same period last year; gross profit margin of tungsten products increased by 7.41 percentage points, mainly due to price increases Influence.

On August 31, Zhangyuan Tungsten Industry released a semi-annual report. In the first half of the year, the company achieved operating income of 1.255 billion yuan, a year-on-year increase of 55.25%; net profit attributable to shareholders of listed companies was 37.236 million yuan, a year-on-year increase of 160.44%. During the reporting period, the tungsten industry market was improving. The prices of tungsten products and associated mineral products increased year-on-year, and product sales and gross profit margins increased year-on-year, driving the company's performance to rise steadily. Among them, ammonium paratungstate, tungsten powder, tungsten carbide, and cemented carbide respectively achieved operating income of 18.106 million yuan, 394 million yuan, 407 million yuan, and 321 million yuan, an increase of 74.21%, 82.64%, 50.27%, and 41.98% year-on-year respectively. According to the 2021 semi-annual statistics of the China Tungsten Industry Association, during the reporting period, the company's tungsten powder product output ranked first in the domestic industry, and its tungsten carbide powder product output ranked second in the domestic industry.

On August 11, Xianglu Tungsten Industry released a semi-annual report. In the first half of the year, the company achieved operating income of 776 million yuan, a year-on-year increase of 27.09%; net profit attributable to shareholders of listed companies was 24.2772 million yuan, a year-on-year increase of 73.93%; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 22.1152 million Yuan, an increase of 1079.09% over the same period last year. In the first half of the year, the powder production department in Chaozhou area optimized and updated equipment. The quality and output of ultra-fine tungsten carbide powder have been significantly improved. The hard alloy raised investment projects have gradually reached production, and the production and sales have been greatly improved compared with last year; Jiangxi area powder and hard The quality of alloy products and the Chaozhou region have basically been synchronized, and the production and sales of all products have increased significantly. Among them, the company’s main product tungsten carbide powder achieved operating income of 598 million yuan, accounting for 77.06 of operating income, an increase of 50.36% over the same period last year, and sales increased by 45.18%; cemented carbide revenue was 90.613 million yuan, accounting for 11.68% of operating income, compared with the same period last year. An increase of 89.74% and a sales volume increase of 107.29%.

On August 23, Luoyang Molybdenum released a semi-annual report. In the first half of the year, the company's tungsten and molybdenum sector achieved a tungsten metal output of 4,272 tons, a year-on-year decrease of 8.4%; sales of 3,857 tons, a year-on-year decrease of 8.34%; inventory of 844 tons, a year-on-year decrease of 2.99%. During the reporting period, the company carried out production exploration in the northern area of Sandaozhuang Molybdenum and Tungsten Mine. Drilling was carried out from the surface of the open-pit mine. The core drill was used to construct 5 drilling holes with a depth of 577.8 meters; in order to prevent geological disasters and ensure the safety of open mining , Carry out empty area exploration in the northern and southern areas of the mine, carry out drilling from the surface of the open-pit mine, and use the reverse circulation drilling rig to construct 25 drilling holes with a hole depth of 948.5 meters.

In order to actively promote the innovation, coordination, green, open, and shared development of the tungsten industry, promote industry exchanges and cooperation, promote key technology research and development and the transformation of innovation results, guide the technological transformation of enterprises, improve the level of process equipment and product quality, and promote industrial structure adjustment and transformation and upgrading , To accelerate the construction of a strong country in the tungsten industry, analyze the development of the industry, discuss the healthy development of the industry, and build a communication platform for the supply and demand of tungsten raw materials. The China Tungsten Industry Association is scheduled to hold the China (Shanghai) tungsten raw materials industry development high-end industry on October 17-19 forum.

(2) International Aspect:

Recently, the Ministry of Finance of Japan is working with the Ministry of Industry, the Ministry of Transport, and the Ministry of Education to strengthen restrictions on foreign investment in 31 rare metals including tungsten, molybdenum, and rare earths. With the expansion of the production of electric vehicles, renewable power generation equipment, and electronic equipment, Japan hopes to maintain its exploration and development capabilities for mineral resources within its territorial waters in order to reduce its dependence on imported resources. Relevant foreign exchange and foreign trade legislation is expected to be implemented in mid-to-late September after public consultation.

Tungsten West, the only tungsten ore operator in Europe, intends to establish a joint venture with GRS, a leading aggregate trading company in the UK, to jointly sell by-products from the development of the Drakelands tungsten-tin ore project owned by Tungsten West. The Drakelands tungsten tin mine is located in the northeast of Plymouth, Devon, UK. It is one of the top ten tungsten mine projects outside of China. It was listed by the British Geological Survey as the fourth largest tungsten tin mine in the world. It was Tungsten West in November 2019. Purchased from Wolf Minerals, Australia. GRS pointed out that the granite produced during the mining of tungsten-tin ore projects is one of the most sustainable sources of construction aggregates.

The Australian Government of Tasmania is launching a plan to spend A$10 million to fund King Island's relocation of the dolphin tungsten mine project. As a skarn scheelite deposit, the Dolphin Tungsten Project is one of the top ten tungsten projects outside China. If the project is to be restarted, KingIsland needs to raise 85 million Australian dollars. In addition to government funding, the company also plans to raise funds through stocks, bonds and other markets.

(3) Outlook for the Future Market:

In August, the PMI of my country's manufacturing industry was 50.1%. After falling by 0.5 percentage points last month, the PMI fell again by 0.3 percentage points, and the manufacturing boom continued to fall. Follow-up or bear pressure from three aspects: First, the supply and demand both weakened at the same time. The production index in August was 50.9%, a decrease of 0.1 percentage points from the previous month, and the quarter-on-quarter seasonality was weaker than in previous years; the new order index was 49.6%, which was higher. The new export order index fell by 1.3 percentage points month-on-month, and the new export order index was 46.7%, a drop of 1 percentage point, falling for five consecutive months. Second, the PMI of large enterprises fell sharply, although it was still at the level of 50.3% on the prosperity and decline line, but it was a significant increase from the previous month. The decline was 1.4 percentage points, mainly due to the decline in upstream commodity prices and the slowdown in aggregate demand; third, companies passively restocked their inventory, and the raw material index remained the same as the previous value of 47.7%, and the inventory of finished products rose 0.1 percentage point to 47.7%. , The purchase volume fell by 0.5 percentage points to 50.3%.

On the whole, in the context of the overall weakening of the manufacturing industry and the large increase in the price of tungsten products in the previous period, the domestic tungsten market is not trading smoothly, and the price of tungsten will show a weak and stable market. At the upstream end, facing the dual pressures of environmental protection and rising inflation, mining companies have insufficient motivation to increase production, and tungsten concentrates are likely to consolidate at a high level; at the midstream end, they continue to face the dual pressures of high tungsten concentrate prices and insufficient downstream demand, and smelting companies’ price inversion pressure increases. Due to the high cost support, the price of APT is difficult to decrease. At the downstream end, due to the decline of the domestic manufacturing industry, cemented carbide users are not willing to stock up at a high level, and the market transactions are mostly based on rigid demand.

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