The Zhitong Finance App learned that recently, tungsten prices have continued to rise, reaching a new high of nearly ten years. According to data from Shanghai Nonferrous Metals Network, on April 19, the price of black tungsten concentrate increased by 1,250 yuan/ton compared to the previous day. The latest price was 133.25 million yuan/ton to 134,000 yuan/ton. CITIC Securities believes that due to the few new construction projects at home and abroad and the short-term increase is very limited, the supply of tungsten resources may continue to be tight. Combined with the recovery in demand brought about by the recovery in the downstream manufacturing industry, the shortage of supply will strongly support the price of tungsten, and the price of tungsten may rise strongly to 18-200,000 yuan/ton.

From the supply side, the total control index for the first batch of tungsten concentrate mining in 2024 is slightly lower than the same period last year. Domestic tungsten mining companies have little momentum and room to increase production due to continuous upward pressure on environmental protection, labor, etc., and even individual mine production declines. Most foreign tungsten mines are under construction and have not had an impact on market supply; at the same time, the intention of suppliers to raise prices is obvious. Overall, the supply of tungsten concentrate is tight. According to estimates by market analysts, the supply and demand gaps are expected to be -2662 tons and -3502 tons from 2024 to 2025, respectively.

From the demand side, expectations continue to increase as the manufacturing industry recovers, which may drive demand for tungsten used in the production of cutting tools and wear-resistant tools. At the same time, as the prosperity of the photovoltaic industry increased, PV module export data improved markedly from month to month. Module emissions increased in March, and demand for photovoltaic tungsten wire used in silicon wafer cutting was boosted.

In terms of imports and exports, in January-February, 1,580.6 tons of tungsten concentrate were imported, up 277.29% year on year. Among them, imported 623.7 tons of tungsten concentrate in February, a sharp increase of 60.19% year on year. In January-February, China exported a total of 3017.6 tons of tungsten products, a year-on-year decrease of 11.7%. Among them, in February, 1285.4 tons of tungsten products were exported, a year-on-year decrease of 23%.

Since the beginning of this year, the rise in tungsten prices has been gradually transmitted from the mining side to the middle and downstream of the industrial chain. At the end of January this year, leading domestic tool companies such as Huarui Precision and Okeyi issued price increase letters, conveying cost pressure. Afterwards, Zhangyuan Tungsten Industry said on April 8 that due to the recent continuous rise in the price of hard alloy raw materials, the company's costs have increased dramatically, and it has decided to implement the new prices for some hard alloy and spray powder products starting April 15. On April 17, Huarui Precision issued a price increase letter, increasing the price of a full range of tool products by 3%-10%.

The main reason behind the price increases of major tungsten companies is the rise in raw material prices. According to SMM analysis, the price of tungsten products has continued to rise since mid-late November 2023 due to tight supply of tungsten ore and price increases at the mine end. With a new round of environmental inspections entering Jiangxi, the production of tungsten mines and smelters will be limited to a certain extent, and the tight supply situation of tungsten ore will be difficult to ease for the time being, and factors such as the downstream branch of tungsten — improving demand for CNC tools have all provided strong support for the strengthening of tungsten prices. SMM expects that in the current situation where the tight supply of tungsten has not abated and many tungsten companies continue to raise, tungsten prices will continue to operate strongly.

A relevant person in charge of the Luoyang Molybdenum industry said that the domestic and foreign manufacturing industry has rebounded this year, and domestic hard alloy consumption has improved slightly. In 2024, due to the gradual recovery in the downstream 3C electronics sector and the expansion of new energy photovoltaic tungsten wire applications, tungsten prices are expected to remain stable at a relatively high historical level.

According to the Guotai Junan Securities Research Report, Huaan Securities released a research report saying that in the context of total volume control, China's tungsten ore faces problems such as declining grade and rising costs. Furthermore, there is great uncertainty about when potential projects at home and abroad will be put into operation. At the same time, demand for downstream photovoltaic tungsten wire, hard alloy, etc. is growing steadily, and the conflict between supply and demand for tungsten resources is becoming more and more prominent. The focus is on recommending high-quality companies with a perfect industrial chain layout and technical and cost advantages. Recommended attention: Xiamen Tungsten Industry (photovoltaic tungsten wire release), Chinatungsten Hi-Tech (Shizhuyuan injection), Zhangyuan Tungsten Industry, and Xianglu Tungsten Industry.

Related concept stocks:

Luoyang Molybdenum Industry (03993): One of the world's largest producers of white tungsten, the world's top seven molybdenum producers and leading copper producers; in 2023, the company's production of all products achieved year-on-year growth, copper, cobalt, niobium, and phosphorus production reached record highs, and achieved a complete layout of copper-cobalt-nickel-lithium new energy metals.

Xiamen Tungsten Industry (600549.SH): Relevant data shows that currently, the annual production capacity of tungsten wire for photovoltaics in Xiamen has reached 100 billion meters. In 2023, the Xiamen Tungsten Industry sold 86.8 billion meters of fine tungsten wire products, of which fine tungsten wire products for photovoltaics sold about 76 billion meters. Based on customer needs and market development, the company is planning a new 100 billion meter photovoltaic tungsten wire production line construction project.

Chinatungsten Hi-Tech (000657.SZ): The company plans to purchase 100% of Hunan Shizhuyuan Nonferrous Metals Co., Ltd. by issuing shares and paying cash. Kakizhuyuan Company is a large-scale non-ferrous metal mining enterprise that mainly focuses on mining. It has abundant metallic and non-metallic mineral resources, and actually produces mineral products such as tungsten, molybdenum, bismuth, fluorite, etc. Its tungsten resource reserves account for more than 30% of the country's tungsten resource reserves, and the world's largest reserves for industrial mining.