Tungsten: Upstream still sees deep processing downstream of supply contraction

According to statistics of the US Geological Bureau in 2015, China's reserves of metal tungsten are 1.9 million tons, accounting for 57% of the world's total reserves; China's metal tungsten production is 71,000 tons, accounting for 81% of global production. According to statistics from the Ministry of Land and Resources, tungsten reserves are mainly concentrated in Jiangxi and Hunan provinces, accounting for 59.2% of the country. Tungsten mines have a high concentration of control rights, and Minmetals' controlled tungsten reserves account for about 30% of the country's total.

Upstream: The country limits the production limit, the effect is not good; the original tungsten supply surplus, but gradually improved.

China has always attached great importance to the management and control of the tungsten industry, and has carried out planned and unified management from mining, smelting, processing, and exporting. Although the national limit production limit, but the effect is not good. The tungsten mining quota for 15 years was 91,000 tons, but the actual tungsten concentrate output in the country was nearly 120,000 tons, and the overdraft rate exceeded 30%. Due to the over-production phenomenon, the original tungsten in China was in an oversupply situation, but the situation gradually improved. In 2014, the surplus was 14,700 tons and in 2015, 1,300,000 tons, a year-on-year decrease of 11%. In 2015, the annual tungsten concentrate price in China was RMB 73,500/ton, down 30% year-on-year. 89% of tungsten mining companies suffered losses.

Downstream: China's tungsten consumption has gradually increased, and the industrial chain structure has been optimized. However, compared with foreign countries, the gap still exists.

In 2015, domestic tungsten metal consumption was 41,500 tons, an increase of 3.23% over the same period of last year. From the past 10 years, domestic tungsten demand has been on the rise. From the perspective of export structure, the pattern of China's tungsten industry has gradually entered the mid-to-high end, and its competitiveness has gradually become stronger, but there is still a huge gap compared with developed countries. Cemented carbide is the largest application area of ​​tungsten resources. In 2014, China's output was 24,900 tons, accounting for 40% of the world total, but its total output value was only 20% of the world's total.

Policy: Triple positive "Tungsten enterprises reduce production" + "State Reserve and Business Reserve" + "Rare Small Metals Regulations."

In March 2016, the tungsten and chemical companies jointly reduced production by 10,000 tons, accounting for 8% of the total production in 2015. Jiangxi Tungsten Industry, Luoyang Molybdenum Industry and other companies have established commercial storage funds to save themselves. In April 2016, the country plans to collect and store 10,000 tons of tungsten concentrate at RMB 73,000/ton, which accounts for 8% of the total production in 2015. In the future, the “Rare Metal Management Regulations” is expected to be introduced, and the management of the industry will rise to the level of the State Council, and the policies have legal effects. We expect a series of measures and policies are expected to help tungsten prices rise and improve supply and demand.

Did not come to see the point: the upper reaches of the supply contraction, the downstream carbide industry is not waiting to be upgraded.

Due to the over-production of associated minerals and the recovery of waste tungsten, which is not included in the total control plan, the tungsten over-exploitation in China has been severe in recent years. On the upstream supply side, the government is expected to strictly control the supply of tungsten associated ore, and the recycling of waste tungsten is expected to be included in the total control plan, so that the entire upstream tungsten supply end can be effectively improved. Downstream applications, with the development of domestic high-end equipment industry, the proportion of domestic hard alloys is expected to gradually increase, reaching the average level of developed countries in Europe and America, while the production of high value-added carbide is the key to the future development of hard alloy industry.