SMM7 March 15: at the "China Tungsten Industry Market and Application Summit Forum and China cemented Carbide Market Application Symposium" held by SMM, Zhu Xiusheng, a consultant of Ganzhou Haisheng Tungsten and Molybdenum Group Co., Ltd., combed the current domestic tungsten market in detail.
I. how much is the output of the mine?
Zhu Xiusheng said mine output since 2020: according to the National Bureau of Statistics, 12 provinces, municipalities and autonomous regions produced 47763 tons from January to May, an increase of 1.87 per cent over the same period last year. According to data from the China Tungsten Industry Association, the output of 35 mines in the first quarter was 15248 tons, down only 0.15 percent from 15271 tons in the same period last year. It seems that mine output has remained basically unchanged.
2. How much tungsten raw materials are available
Tungsten raw material supply includes mine output, waste tungsten utilization, raw material (including tungsten concentrate, APT) inventory, import.
Waste tungsten includes waste catalyst, tungsten slag, tungsten processing grinding materials, waste tungsten products and so on. It turns out that a considerable part of the waste tungsten is imported from abroad. Since 2018, the customs data has been zero, and the amount of smuggled imports has dropped significantly, due to the increase in the utilization rate of waste tungsten abroad, and even began to export waste tungsten. Therefore, the supply of waste tungsten will at least not increase compared with before 2015, which is regarded as flat.
Import volume
Inventory
Third, what is the demand?
Export of tungsten products
Tungsten exports from January to May 2020 totaled 7900 tons of metal, down 21.95 percent from 10100 tons in the same period last year. Compared with the same period last year, tungsten concentrate consumed 4800 tons less, equivalent to 3400 tons less APT.
Domestic consumption
Only statistics show that the reduced output of processed products of enterprises in the first quarter compared with the same period last year consumes very little APT1000 tons, and the industry-wide calculation should be larger than this data. In the first half of the year, coupled with the reduction of tungsten exports, the consumption reduced by at least 6000 tons of APT.
According to statistics in the first quarter, 24 APT production enterprises produced 17,100 tons of APT, which was 3300 tons less than that of 20400 tons in the same period last year. According to the statistics, 24 enterprises have a APT production capacity of 136500 tons, and there are 39 domestic APT enterprises with a production capacity of 204300 tons. The amount of APT produced less than that of the same period last year must be more than 3300 tons. According to this ratio, the less APT produced in the first half of the year is roughly equal to the less consumed APT. Inventory has basically not decreased in the first two years.
The result is that the market is still oversupplied, the inventory is still large, and the tungsten market is still on a downward track.
What does the market think in the future
1. Will there be any change in exports?
IMF, the United Nations, the World Bank and the Organization for Economic Cooperation and Development published their forecasts for the world economy in 2020 at the beginning of the year. Although they have lowered the last forecast in 2019, they are still full of expectations and optimism for economic development in 2019 and 2021. Due to the impact of the epidemic, the economic growth rate of the main exporting economies of tungsten products in China decreased significantly in the first quarter.
2. Domestic consumption
The latest economic forecast released by the World Bank on June 8th: China is the only major economy with positive growth in 2020, forecasting GDP growth of 1.0 in 2020. The IMF's latest economic forecast for June 24 is 1.0, which is exactly the same as that of the World Bank.
Under the influence of the trade war between the United States and other major economies and Britain's Brexit from the European Union, the growth of world trade has slowed significantly, private consumption and investment activities have also weakened, and the growth of China's exports slowed significantly after the second half of 2018. Mechanical and electrical products, which account for more than 58% of China's exports, are the main consumers of tungsten metal processing products, and the export value of mechanical and electrical products has also declined.
In the first half of the year, the export volume of mobile phones was 386.41 million, down 3.2 percent from the same period last year, a decrease of 12.37 million, and the number of mobile phone vibrators alone decreased by 12.4 tons. Car exports in the first half of the year were 440000, down 11.9 percent from the same period last year, or 52000. In the first half of the year, the export volume of LCD panels was 575.094 million, a decrease of 19.6% and 112.718 million compared with the same period last year. The export volume of ships in the first half of the year was 2291, down 27.4 percent from the same period last year, or 628 ships.
The above data show that the export volume of mechanical and electrical products decreases, domestic production naturally decreases, and the demand for tungsten decreases synchronously.
In the second half of the year, mainly from 2021, once the global epidemic improves and the global economy restarts, especially the manufacturing industry, there will be a stage of rapid growth, which will undoubtedly lead to a rapid growth of tungsten demand. At that time, the market is sure to get better.
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