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Tungsten ore prices go down to cost

So far, the price of tungsten has fallen more than expected. The price of tungsten concentrate in early March was still 95,000 yuan / ton, and the current price is only 80,000 yuan / ton. The factors that caused the price to fall sharply are many.

First, of course, the objective factor is of course the outbreak of the global epidemic, which has caused a global shock to global production and demand. This disease, which has swept the world, is far from over. That is, after China, a large number of factories in Japan, South Korea, Europe and the United States stopped production, the economy was temporarily suspended, and the capital market was panic. These are objective facts. For tungsten consumption, this will have a very large impact.

Secondly, the subjective factor is that market people are affected by objective factors. Risk aversion and worry are superimposed, and they start irrational operations. Some manufacturers are eager to cash in the goods in their hands and keep selling at low prices, but the more the price declines rapidly, The more delay the downstream manufacturers purchase, this will cause a vicious circle of price decline.

In terms of products, the price of tungsten ore has fallen below 80,000 yuan / ton. This is also before September last year, the price of tungsten returned to 80,000 yuan / ton. This price is very delicate for the tungsten market. According to the past two years, The trend of the tungsten market, it is estimated that the affordable price of tungsten mines is around 80,000 yuan / ton, that is, if everything is normal on the demand side, the tungsten price may rebound at any time. Judging from the reaction of the tungsten ore market in recent days, the number of manufacturers that continue to sell at low prices has begun to decrease, but this can only be considered as a phase. It is too early to stabilize, the current demand is not satisfactory, and the impact of the epidemic on demand will be comprehensive, deep and uncertain.

The APT market is empty. Except for a small number of long orders in the past two weeks, the bulk transaction has almost stagnated, with only a small amount of rigid demand, and the more the price has fallen sharply, the more there will be no transactions. At the beginning of the week, the price of APT was still around 130,000 yuan / ton, and now it has fallen directly to 122,000 yuan / ton. Moreover, it is not a price issue now, but no one is taking the order. The mentality of the buyer is to buy up or not to buy. The raw materials bought at the beginning of the week will have to bear the difference of thousands or even 10,000 yuan / ton by the weekend, so they will not enter the market unless they have to.

A pessimistic fact is that there have been smelters for half a month or so without sales outside long-term orders, but the smelters have not been shut down, which will cause some inventory backlogs. By April, if demand is not yet visible If it improves, then the suspension of production and maintenance or reduction of production will be a choice that some manufacturers have to make.

The tungsten powder market continued to be deserted last week. There are fewer inquiries, and the prices of powder factories have been reduced. At present, the prices of large powder factories are still around 205 yuan / kg, but this price is difficult to sell. Small powder factories are based on orders and Depending on the price of raw materials, the market price is from 200-205 yuan / kg, and the order in the powder market is very poor.

Existing orders are okay. The epidemic situation in February and March affected the start-up of the plant, so some orders have been accumulated. Currently, powder alloy plants are rushing to meet these orders. However, the order situation in April and beyond is not ideal. Whether it is due to price delays or poor demand, it is difficult to say at present. I believe that there are two factors, but as the domestic epidemic eases, the consumer side will also have How likely is it that there will be a cliff-like reduction in domestic demand? In short, the fact is that the new orders received by the powder mills are indeed very small, so it is not meaningful for them to lock in APT.

There is no good news in the international market. Affected by the outbreak of the global epidemic and the chaos in the financial market, foreign tungsten companies have insufficient confidence in the later market, and their attitude is mainly bearish. Recently, the transaction volume has decreased. Most of the transactions in Europe and the United States are based on spot, and many manufacturers have already purchased in February. However, the purchase volume in January and February was not correct. Most of the major tungsten products, except iron tungsten, have Reduced to varying degrees.

In summary, the global economy is facing unprecedented pressure. The impact of the epidemic has brought huge impacts on major economies in the world. While countries are busy responding to the epidemic, they are also actively promoting market confidence through various stimulus policies.

Under such a background, the downward price of tungsten is inevitable, but the price is falling so fast, and it is not just the demand side. The panic attitude is also one of the reasons. Although over time, both buyers and suppliers have been actively destocking. The supply has increased but the demand has decreased. The market has entered a period of cost support. Today, the price of ore is already near the cost line. If the market continues to improve, the possibility of suspension or reduction of production for mines, smelters and other production companies will Will increase greatly.

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