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Tungsten Market Analysis 3-9: Shipments Increase Tungsten Prices Fall

Last week, there were more supply-side remanufacturers and more products, coupled with the increase in the shipment mentality of trading manufacturers, and the weaker demand side, leading to a decline in market prices. Although the decline was small, will it be the beginning of a downward market, It is difficult to judge at this time. The impact of the epidemic on the consumer market has not diminished because of the alleviation of the epidemic. Instead, after market energies shifted from the epidemic to the market, it was discovered that the impact of the epidemic had just begun, and the pressure had not yet been lifted. Moreover, the epidemic situation in South Korea, Japan, Europe and other regions is still in an outbreak period, and its impact on the global economy has not yet been known, but the first impact is definitely on the mentality, so pessimism in various industries has increased. It is also reasonable.

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Beginning in March, the tungsten market has changed, and the "strength" of the supply side has gradually failed. Although the newly produced tungsten sand is still very small, many small and medium-sized private mines have limited start-up, and this part of the mine is officially the most important raw material for the bulk market. However, no output from the mine does not mean that the market is out of stock. Many trading manufacturers' stocks have been put on the market one after another. Because they have a certain profit margin, if they are in a hurry to sell, they do not rule out the appearance of lower-priced goods.


Another effect of the increase in miner shipments is to make buyers more cautious. Many smelters will use their own inventory first, and really need to replenish before entering the site for purchase, and this depends on the sales of APT. From the current point of view, APT sales are not optimistic, from two perspectives. The smelter has lowered its offer and the transaction price has fallen. According to this website, at the beginning of last week, two domestic smelters were still trading at 143,000 yuan / ton of cash, 


Small and medium-sized powder factories have the same mentality. Throughout February, all powder factories that were in operation were supplemented with lack of raw materials. If pessimism about the market outlook is heavy, or their own orders are not ideal, there will be no large-scale purchases. From this point of view, the purchase of long orders will continue for a period of time in the future, but the price will be relatively low, and the purchase of bulk cargoes will have a lot of uncertainty, and at least there will not be a lot of entry in the next two weeks.


Summary. First of all, from the perspective of supply, the output in the first quarter will inevitably decrease year-on-year, but the epidemic will ease, and the supply will only increase. From the perspective of market circulation, as the market growth has slowed in early March, the mentality of some stockholders will inevitably change. After all, the price of tungsten ore rose by nearly 0.5 million yuan / ton throughout the beginning of February. Profit space, so it is not ruled out that some trading manufacturers will be eager to sell.


APT production was also affected by the epidemic: the national output in February was only over 3,000 tons. However, APT is not short of inventory, and the smelter operation is better than mines. Most of the smelters in Jiangxi have started production, and now mainly digest the reserves of tungsten sand. Therefore, for the current smelter, if the price is higher than 141,000 yuan / ton, it is also profitable. The difficult period has not yet arrived, but signs have emerged: first, the price of APT has not continued to rise, and downstream procurement has been under pressure, and the acceptance of high-priced APT is very low; in addition, with the consumption of tungsten sand inventory, smelters must continue to maintain production Tungsten sand must be purchased. If the output of tungsten ore is not followed up in time, it will inevitably increase the difficulty of purchasing tungsten sand and APT products will be upside down. Because in the past two years of market conditions, the right to speak at the APT side is relatively weak, so the simultaneous pressure of upstream and downstream may occur.


From the demand side. For the future market, powder alloy manufacturers are mostly pessimistic, or at least cautiously optimistic. Today, the powder factory has completed the orders in March around mid-February, and has not yet felt the impact of the epidemic on the demand side. After mid-March, there may be a new batch of orders coming in, which will directly reflect the order situation of the alloy plant, and will also feedback the consumption of tungsten to a certain extent.


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