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Tungsten Market Analysis 1-17: The market is quiet at the end of the year

Regardless of policy de-capacity, or ”°de-capacity”± due to market reasons, the capacity of tungsten ore has been significantly controlled in recent years. There are no new large mines in 2020, so capacity changes are not significant. The supply structure has changed. The supply of small and medium-sized mines is decreasing. The supply of large-scale mines is increasing but most of them are digested internally. The upstream industry concentration has gradually increased. The internal market share has gradually expanded to further squeeze the external market space. In other words, the supply of tungsten concentrates will remain tight in 2019, and insufficient free circulation will provide conditions for unsatisfactory sales and prices.

Judging from the market conditions for the whole year of 2019, the cost of tungsten ore, or the price that the mine can accept, is 85,000-95,000 yuan / ton, and below 90,000 yuan / ton is difficult for most mines. accept. If the price of tungsten ore fluctuates in this range in 2020, it is difficult for the production capacity of tungsten sand to be released sufficiently. If the price is maintained at a low level, the sale price of tungsten sand will become the norm, and the sale price will cause market circulation. The amount of tungsten ore is unstable.

The situation on the demand side is relatively complicated, and growth requires the efforts of traditional industries.

The large economic environment has a negative impact on the demand side, so most people in the industry are cautious about the future market demand growth, and concerns about the market outlook also restrict manufacturers 'confidence in entering the market. However, because of this, manufacturers' raw material inventory is all At a low level, potential procurement efforts are still in progress.

 Automobile and mobile phone consumption decline, resulting in a decline in consumption of alloy bars in 2019. Although the market prospects of 5G mobile phones are broad, compared to the demand for tungsten, it is a slap in the bucket. The possibility of a further global recession in 2020 is relatively high, and it will continue to weigh on the consumption prospects of traditional industries, so demand growth expectations are not high.

However, for China, 2020 is the year when a well-off society will be fully established and the "Thirteenth Five-Year Plan" ends, and 2021 will be the 100th anniversary of the founding of the Communist Party of China. At these two historic moments, domestic policies are bound to It is more closely centered on economic construction, so the possibility of domestic economic growth to maintain stability is relatively large, and domestic demand is still the most powerful market guarantee.

(2) The export is expected to be restored.

In 2019, due to factors such as destocking of foreign manufacturers, slowing global economic growth, and geopolitical turmoil, global tungsten demand is sluggish, and consumption in 2019 will decline significantly. But with consumers replenishing depleted stocks and the signing of the China-US trade agreement, demand for tungsten is expected to recover in 2020.

2. Other factors

(1) Environmental inspection. There is still no "better" solution to the problem of APT's smelting waste. In 2019, the APT processing fee in Ganzhou area rose to 12,000 yuan / ton, and the production cost of the smelter increased.

(2) Trade speculation is expected to decrease.

(3) Long-term quotations of large tungsten enterprises are cross-referenced, and prices are more uniform.

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