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Tungsten Market Analysis 4-13: Weak demand, sharp contradiction between supply and demand

The global epidemic continues to erupt. Currently, the number of diagnoses has reached 1.84 million, affecting more than 200 countries and regions around the world. The major economies in the world have been severely affected. Their impact on global production and demand is immeasurable. The epidemic temporarily placed economic development in a relatively minor position.

    For the tungsten market, the impact of the epidemic situation is also very obvious. First of all, for the domestic market, the production start of production enterprises was delayed in February and March. After the start of late March, tungsten enterprises started to work, but the weak consumption of tungsten began to appear, which is different from traditional manufacturing. Related tungsten consumption has decreased significantly, small and medium-sized manufacturers have low operating rates, poor sales, and increased business pressure. A small number of production enterprises have stopped production in April.

    As for the export market, the epidemic situation in countries such as Europe and the United States has not alleviated, and production and demand are paralyzed or semi-paralyzed. This is a big blow to domestic exporters, and export data in recent months will be ugly. In addition, blocked exports will on the one hand affect the overall domestic consumption of tungsten, on the other hand, it will also convert the products that should be exported to domestic sales, thus making the domestic supply surplus.

    Up to now, the price of tungsten ore (subject to black tungsten concentrate) has dropped to about 75,000 yuan / ton. The downside resistance now mainly comes from the mining cost of the mine. Many mines believe that the current price is a bit low, and if there is no financial pressure, they will wait. However, the pressure that the mines are about to face is obvious, especially for private mines, which were originally started late, and finally started production, but now they are facing too low prices. At this time, they have to choose to continue production or stop production and maintenance, but they all have to face losses. .

    The price of APT also continued to decline. The current transaction price is RMB 115-11.7 million / ton. The recent bulk transaction is better than March, but this does not mean that the demand has improved. Only some orders have been delayed until the near future. After delivery, it may be deserted again. There is no indication that actual demand has improved. Instead, the smelter has suffered in the near future. Long-term orders of large enterprises are either suspended, reduced, or prices are low, and SMEs are solely based on their own orders. If the orders are not there, they will not be bought.

    Recently, as prices are getting lower and lower, some hot money is eager to move and want to bargain at a low price. This behavior is not good news for the long-term development of the tungsten market. Although it may stimulate price increases in the short term, these goods end up It still depends on the production companies to digest. Occasionally the capital injection will only aggravate the market turmoil and will not bring about substantial changes.

    It is understood that there are already smelters that are unable to bear the low prices and difficult to sell and choose to stop production and maintenance. Since March, the smelters have started to work normally, but the sales volume is insufficient, resulting in some inventory, which is relatively high prices. The real problem that smelters need to face is that if APT continues to sell badly, then there will be a lot of financial pressure for them, and it may be helpless to sell at a low price.

    The situation of the powder alloy market is also not optimistic. Although a few days ago, many powder factories indicated that orders had increased, and some powder factories originally planned to stop production at the beginning of the month, but after receiving some orders, it was necessary to continue production. However, it is understood that most of these orders were delayed in March, and the fact that total demand is weak has not changed.

    The price of medium-grain tungsten carbide is now 190-195 yuan / kg, and the price of medium-grain tungsten powder is 193-198 yuan / kg. The transaction prices vary greatly. Some small and medium-sized powder factories have prices below 190 yuan / kg, and various low prices frequently appear. It will bring some influence to the company's quotation. The powder market will continue to remain weak after the recent alloy plant needs to be replenished.

    Summary: Under the background of the epidemic impacting the global market, the tungsten market will inevitably suffer from sluggish demand. In March, domestic tungsten factories have basically started production. Most of the orders made by these manufacturers have been accumulated before, and the amount of new orders Relatively few, in addition, prices have fallen sharply, and many purchases have been delayed until early April. By the beginning of this month, the market trend was relatively flat. At this time, new orders entered the market, and the real downturn in the problem was undoubtedly exposed. The current tungsten price has fallen below the hearts of all parties. This is by far the only driving force that can support the market. In the face of the complex and sluggish demand at home and abroad, it is difficult to judge when the tungsten price bottoms, but as the price increases The lower the price, the pressure and control from cost will gradually deepen.

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