Recently, the reporter learned that since June, APT(ammonium paratungstate, tungsten fine powder smelting products) rose to 210,000 yuan/ton, a month up 20,000 yuan/ton, an increase of 10%; The price of tungsten carbide powder rose to 315 yuan/ton, a monthly increase of 8%. Other tungsten downstream products such as carbide also have varying degrees of increase.
Since January this year, tungsten concentrate prices have risen for six months in a row, a cumulative increase of nearly 25%, but downstream tungsten powder and hard alloy rising difficulties, resulting in downstream costs upside down. But since June, tungsten downstream products for the first time quickly followed up, contributing to the market singing multi atmosphere. The biggest driving force behind this round of price rises in tungsten concentrate is: since the end of last year, Minmetals Nonferrous metals has been at a price 5,000 yuan/ton higher than the market, to buy tungsten fine powder to the market in large quantities, dragging the Tungsten Price from the bottom. There is news that Minmetals nonferrous acquisition behavior is entrusted by the State Reserve Bureau. But the reporter learned that the State Reserve Bureau and Minmetals nonferrous metals on the acquisition of tungsten ore storage has several negotiations.
Minmetals overpaid
Tungsten concentrate was last quoted in early June. On June 5, Ganzhou Tungsten Association raised the price of 65% wolframite fine powder by 2,000 yuan to 135,000 yuan per ton. Minmetals nonferrous metals one-time increase of 20,000 yuan per ton, to 155,000 yuan/ton. According to the custom, Minmetals nonferrous metals price twice a month, but in mid-June there was no price increase information. Analysts say Minmetals nonferrous metals rose more in early June. The State Reserve commissioned the purchase and storage of 10,000 tons is the biggest news in the tungsten industry this year. Reporters recently learned that at present, the State Reserve Bureau and Minmetals Nonferrous Metals only on the purchase and storage of tungsten ore had several negotiations, the State Reserve formally entrusted Minmetals to purchase and storage is not yet conclusive. "At least not so much." Insiders believe that. But Minmetals nonferrous metals to the market to acquire a large number of tungsten concentrate indeed. Reporters learned that since the end of last year, many tungsten mining enterprises in Ganzhou received Minmetals purchase orders, until June, Minmetals is still continuing to buy, each offer is higher than the market price of 5000 yuan/ton, that is, about 4%. Minmetals is the largest domestic producer of tungsten concentrate, controlling 20-30 per cent of the country's output. Analysts believe that a large number of Minmetals acquisition is a kind of market support behavior. If the State Reserve commissioned Minmetals tungsten collection ultimately failed, Minmetals acquisition behavior will become a voluntary enterprise behavior. Analysts say the State Reserve commissions companies to buy can reduce market supply and support prices, but companies eventually sell into the market after the purchases, hitting prices. An industry insider analysis, China's annual output of tungsten concentrate 120,000 tons, the acquisition of 10,000 tons can affect the market. At 130,000 yuan per ton, 1.3 billion yuan is needed, making it an easily manipulated product.
WTO dispute variable
Qiu Wanyi, secretary-general of Ganzhou Tungsten Industry Association, recently said at the 2013 Tungsten Molybdenum-vanadium Titanium special alloy industry chain Summit Forum that APT and tungsten powder export tariffs may be removed by the end of this year. Tariff policy change may affect tungsten price trend. On March 13, 2012, Obama delivered a speech at the White House, announcing that he would file a trade case to the WTO against China's export restrictions on rare earth, tungsten and other products. The European Union joined Japan in the appeal. This is not the first time that the international community has taken China to the WTO over export tariffs on resource goods. In June 2009, the United States and the European Union filed a lawsuit with the WTO, claiming that China's export quotas, export tariffs and price and quantity controls on nine raw materials, including bauxite, coke (1484,28.00,1.92%), phosphor, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc, violated China's WTO commitments. The United States and Europe won the trade dispute. In 2013, the 40% export tariff on Chinese coke was officially abolished. Qiu Wanyi said that the EU and other countries have always believed that China's 5 percent export tariff on APT(ammonium paratungstate) and tungsten powder companies violates the WTO principle of free and fair trade. Now the lawsuit has entered the hearing stage, the neutral country will be asked to hear the ruling. "The EU is in a legal battle with us, and we are certain to lose. Export tariffs are expected to be lifted by the end of this year," Qiu said. "We will make concessions if we lose, [possibly] cancelling tariffs before revoking licences." Will the removal of tariffs lead to higher tungsten prices? Analysts believe that the current overseas demand is not strong, and the price difference between domestic and foreign tungsten products is not large, tungsten export is expected to be stable. China considers both tungsten and rare earths rare minerals to be under priority protection. It is not in China's interest to sell tungsten cheaply for long.
The downstream first followed up
From the supply and demand situation of the industrial chain, the current demand of the tungsten downstream processing industry is not good. After the repeatedly rising tungsten price this year, the prices of tungsten smelting and downstream processing products have been inverted for a long time. Market observers said that after the acceleration of the price increase of tungsten concentrate in April, the domestic tungsten market performance was stable, with merchants' shipment intention not strong, downstream procurement is not high, and the transaction was cold, while the tungsten and iron market quotation was chaotic, and the inventory backlog was quite large. Xu Aihua, a senior analyst at Antaike, said that although new orders received by tungsten processing companies are better than in the past, they are not enough to support price increases, so that the terminal price and raw material price are inverted. If upstream prices deviate significantly from downstream demand for a long period of time, it is not good for the industry. Tungsten has high melting point, tungsten carbide has high hardness, wear resistance and refractory. These excellent properties make it widely used in machinery manufacturing, mining and engineering construction and other fields. As a result, tungsten demand is tied to heavy industries such as manufacturing, mining and machine tools, and has been depressed by the economic downturn in China this year. The United States, Japan and Western Europe are the main consumers (regions) of tungsten in the world, accounting for 60%-65% of the world total consumption. Exports of tungsten fell 20 per cent in the first four months of this year because of the slow economic recovery in Europe and the US. However, in June Minmetals nonferrous tungsten fine powder after a one-time price increase of 20,000 yuan, tungsten iron and APT latest offer up. Some analysts said, tungsten downstream price after the market acceptance is not high, afternoon market how to still depend on the downstream market transaction situation. Secretary General of Ganzhou Tungsten Industry Association believes that considering the environmental protection investment and other factors, the current tungsten ore price is reasonable. It is expected that the average tungsten price this year will increase from 118,000 yuan last year to 130,000 yuan.