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After the forced rebound, where should the market go?

At the end of August, the original “Pan-Asian Metal Exchange” involved more than 28,000 tons of APT listing auction, the starting price was about 86,400 yuan / ton, as everyone expected 10 million yuan / ton of 20%, despite the final Pan Asian inventory It has been basically determined that the market has not had a substantial impact.

First of all, the main raw materials are upside down in different degrees. Some of the above factors have pushed the market prices to rebound in different degrees. Market participants generally believe that the rebound space is very small. Considering the long-term upside down of tungsten products, the upward adjustment is also expected.

Since the price has been in the downside for most of the past eight months, the manufacturer will not prepare too much raw material inventory, especially in the case of pan-Asian inventory problems in July and August, the manufacturers have reduced the raw materials. At the lowest point, the processing of pan-Asian stocks has come to an end, but the factory still has to start production, and the raw materials must be purchased. Therefore, before the pan-Asian stocks are released, large and small enterprises need to supplement the necessary raw materials, so that the transaction price will be firmer.

According to the performance of the mines in the past two months in July and August, the mine price of about 70,000 yuan/standard tons is almost the limit that most manufacturers can bear. Some mines even said that they would rather mortgage the goods to the bank to solve the funding problem. Unwilling to "sell" the ore at this time, and because of this resolute attitude, the price of tungsten sand has slightly turned back. However, if Pan Asia's stocks flow to the market, and the production of tungsten sand continues, and there is no significant increase in the demand side, the congestion on the supply side will continue and will continue for a long time.

The pan-Asian inventory problem has not yet had a substantial impact on the price of APT. According to the statistics of this website, the output of APT in August is about 6,200 tons, which is more than that in July, mainly due to the resumption of production in some smelters. The cumulative output of the month is about 58430 tons.

Some smelters that were discontinued in September started to resume work, but now the output of the APT plant is limited by the purchase price of tungsten sand and sales. For a long time to come, the production of smelters will be greatly restricted. Stopping may become the norm, so the start of the smelter is not stable and the output will be unstable. According to the statistics of this website, the average output of APT in the past 4 months is 7000-8000 tons/month. According to this average, the total output in the three months of September, October and November is expected to be 21000-24000 tons. Expected at 80,000-83,000 tons. If the inventory of the Pan-Asian APT flows into the market, the supply will reach 10.8-11.2 million tons. According to the statistics of this website, the annual output of APT was about 110,000 tons last year. However, the demand for tungsten in the market was very strong last year. The output of cemented carbide and the export volume of tungsten products reached new highs. This year, the demand has weakened. In this context, It is very difficult to continue to consume the same amount of APT. Moreover, the premise is that there must be no more smelters to increase production or re-invest in production.

In summary, the supply and demand of tungsten market is tight. Because the prices of major raw materials are upside down, “forced” rebounds. However, this rebound is only temporary. After returning to the relative normal price, whether the demand can enter the market in time determines whether the market can More long-term improvement.
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