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[SMM Analysis] Tungsten Raw material Enterprises cover the Sale Market to adjust the mood
May 16,2020 19:52CST
The content below was translated by Tencent automatically for reference.

SMM5 March 15: at the end of April, the tungsten city seems to have finally ushered in a spring recovery.

Since the start of the sharp decline in March this year, continue to test the affordability of mines, smelters and other production enterprises, prices decline step by step, enterprises continue to retreat, and finally in the price of wolframite concentrate reached 74000 yuan / ton, the market ushered in new opportunities.

Source: SMM65% wolframite concentrate, APT

Before May Day, many tungsten concentrate holders in the market have no intention of shipping, probably under the existing raw material cost has been unable to bear a lower sales price, so choose to cover the plate to sell. A benign market should not force any link of the industrial chain to give up the profit space it should have. At that time, the falling weak tungsten prices finally began to stop falling, but also due to the mining enterprises cherish sales and some hot money active, starting from the end of the mine, the price began to rise.

Up to now, the market price of 65% wolframite concentrate is 78000-80000 yuan / ton, APT price is 120000-122000 yuan / ton, tungsten carbide price is 189-193 yuan / kg, tungsten powder price is 192-196 yuan / kg, 70% tungsten iron price is 141000-143000 yuan / kg, up from 6%-8% at the end of April.

Source: SMM tungsten carbide, tungsten powder

Although raw material prices and corporate mindset and selling have stabilized tungsten prices and begun to reverse, it may remain to be seen whether there will be a sustained incentive to support prices in the future.

Under the continuous fermentation of the overseas epidemic situation, the orders of downstream cemented carbide and related products enterprises have been seriously damaged. Even as the pace of overseas resumption of work and production will accelerate in May and June, the new orders received are still very few, and the transaction intention after the inquiry is not strong. Overseas downstream is still mainly to digest inventory, procurement demand release is slow.

Back in China, the "contradiction" between the tungsten industry chains still exists, mainly whether the price adjustment from the mining end can be reasonably transmitted to the end of the industry chain. At present, the normal production of APT smelting enterprises are in a dilemma in the face of the dilemma of the holders of tungsten concentrate: if they accept the rise in mineral prices, they need to boost the price of APT; if they wait and see and do not replenish the goods, they may also lose a wave of market opportunities.

Look at the terminal. The acceptance space of raw material price adjustment by alloy enterprises is relatively limited. Under the influence of the epidemic at home and abroad this year, orders for downstream alloy enterprises have been reduced or postponed. Based on this, the price of alloy products has been reduced slightly this year, if we continue to face the price of upstream raw materials continue to rise, it may be more difficult.

SMM believes that the return of tungsten prices is really reasonable, but for the long-term and orderly development of the industry, rapid rise can not be said to be the best policy. The two sessions will be held soon, after the Ministry of Industry and Information Technology announced a 60% year-on-year increase in excavator sales in April, and the substantial promotion of new infrastructure, the market can still look forward to this, optimistic, prudent, steady operation.


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