In a significant move that has stirred the tungsten market, several listed tungsten companies announced increases in their long-term procurement prices on November 21stThis development prompted the China Securities Journal to delve deeper into the situation by reaching out to leading tungsten enterprises for confirmation.
One such confirmation came from an employee at Zhangyuan Tungsten Industry, who verified that the company had indeed raised its long-term procurement prices for the latter half of NovemberSpecifically, the price for 55% black tungsten concentrate surged from 139,500 CNY per metric ton to 142,000 CNY, while the price for 55% white tungsten concentrate climbed from 138,500 CNY to 141,000 CNYThis adjustment reflects an increase of over 2,000 CNY per metric ton, primarily attributed to a need for market alignment.
Tungsten, though classified as a minor metal, plays a crucial role across various industries, including automotive, aerospace, machinery, and electronicsThe recent uptick in tungsten prices can largely be attributed to tightening supply conditions rather than a significant increase in demandAs noted by the Zhangyuan representative, supply constraints have been a driving force behind these price adjustments, largely due to stricter environmental regulations that have forced some smaller enterprises to shut down operations for failing to meet compliance standards.
The employee elaborated on the main sectors driving tungsten demand, highlighting that industries such as automotive and aerospace are critical users of this metalTungsten’s unique properties, particularly its ability to withstand extreme temperatures, make it indispensable for numerous industrial applications.
Meanwhile, a representative from Xiamen Tungsten Industry stated that while they had not yet received notifications regarding price adjustments, changes from the business department might occur soonAn overview of market quotes indicated that tungsten concentrate long-term procurement prices have been experiencing upward fluctuations in recent months
Advertisements
Although current prices are higher than at the beginning of the year, they remain significantly lower than the peaks reached in May.
In May, the tungsten concentrate market experienced a notable surge driven by supply constraintsHowever, prices retreated once downstream demand failed to keep paceThe Zhangyuan employee remarked, "In May, prices reached 160,000 CNY per metric ton, which is nearly 20,000 CNY higher than current ratesThe future market dynamics will largely depend on the recovery of downstream demand."
Examining the performance of key players in the tungsten industry reveals that out of the four listed companies—Zhangyuan Tungsten Industry, China Tungsten High-tech, Xianglu Tungsten Industry, and Xiamen Tungsten Industry—two reported year-on-year revenue increases for the first three quarters of 2024. Specifically, Zhangyuan Tungsten Industry demonstrated the most substantial growth, achieving a revenue of 2.823 billion CNY during this period, reflecting a 12.1% increase compared to the previous yearTheir net profit attributable to shareholders also saw a remarkable rise of 33%, reaching 147 million CNY.
Investor relations documents from Zhangyuan Tungsten Industry indicate that the national government strictly controls tungsten mining operations, imposing annual extraction quotas that regulate the company’s primary mining areasNotably, all tungsten concentrate produced is utilized in-house, with around 20% of raw materials sourced externally to supplement productionThe company is committed to optimizing the utilization of tungsten resources and focuses on developing high-performance, high-precision, and high-value-added cemented carbidesTheir strategy emphasizes extending their integrated production system while advancing the digital transformation of their production workshops, with aspirations to create an intelligent, efficient, high-quality, and safe manufacturing environment.
On the other hand, Xiamen Tungsten Industry reported approximately 26.369 billion CNY in revenue for the first three quarters of 2024, marking a decrease of 10.7% year-on-year
Advertisements
Advertisements
Advertisements
Advertisements