Abstract Tungsten is China's dominant resource. Tungsten is a non-renewable resource. The global mining life is less than 40 years. The scarcity of resources has drawn the attention of all countries. China's tungsten reserves are the world's number one, occupying half of the world's top ten mines. Domestic tungsten mines are mainly distributed in Jiangxi, Hunan, and...
Tungsten is China's dominant resource. Tungsten is a non-renewable resource. The global mining life is less than 40 years. The scarcity of resources has drawn the attention of all countries. China's tungsten reserves are the world's number one, occupying half of the world's top ten mines. Domestic tungsten mines are mainly distributed in Jiangxi, Hunan, Guangxi, Fujian and other provinces. With the consumption of tungsten resources, waste tungsten has become an important source of tungsten due to its high content and easy recovery. Frequent policies and strengthened regulation. Since China first listed tungsten as a protective mining species in 1991, the regulation of China's tungsten industry has never stopped, from total production control to export quota management, from export tax rebates to tariff levies. However, due to the serious indiscriminate mining, the effect of regulation is not satisfactory. In this case, Minmetals has the responsibility of integrating domestic tungsten resources.
Minmetals has a monopoly on the domestic tungsten industry. Minmetals Nonferrous has controlled more than 90% of the tungsten resources in Hunan Province by holding 100% equity of Hunan Nonferrous Metals, and at the same time controlled the most competitive Zhuzhou Cemented Carbide Plant in China. At present, Minmetals Nonferrous has more than 75% of China's tungsten resources, accounting for more than half of the country's production; domestic tungsten product export quotas are also concentrated in the hands of Minmetals. Minmetals has achieved the goal of enhancing the global discourse power of the Chinese tungsten industry by controlling domestic production and exporting. In October last year, Minmetals regained the quotation rights of the two subsidiaries, changed to the group's unified quotation, and led the tungsten price to rebound sharply by 15% by substantially increasing the quotation. Minmetals' small test knives have led us to believe that its monopoly position will have a greater impact on the future tungsten market.
Demand is picking up and consumption is upgrading. Tungsten is widely used and has obvious military uses. Global tungsten supply and demand are basically balanced, but the domestic tungsten consumption structure is unreasonable, and the demand for hard alloys is too low. Cemented carbide gradually replaces traditional alloy tools with its high hardness, wear resistance and high temperature resistance. The new material “12th Five-Year Plan†also lists high-end cemented carbide products as the focus of development. Fujian Xiamen and Hunan Zhuzhou will become China's two major cemented carbide production bases. We judge that the growth rate of tungsten carbide demand for tungsten in the next three years will be 4%, and the growth rate of tungsten steel to tungsten will be 5%. The increase in downstream demand will drive the recovery of tungsten price.
Industry investment strategy: In the future, the tungsten industry will focus on the theme of “supply contraction + demand recoveryâ€. The total control of tungsten concentrate mining and the recovery of downstream demand will drive the price of tungsten to rise steadily. The strength of price recovery depends on the economic improvement. It is recommended to focus on the tungsten industry in Fujian and the Xiamen Tungsten Industry that benefits the integration of rare earths.
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