The first trading week of June, China domestic tungsten market has slight fell down, and the price continues decrease slowly. APT price decreasing range and speed is higher than tungsten concentrate and tungsten powder.

In mid-May, the tungsten price is being decrease slowly, but the tungsten concentrate decline range is not so obvious. 65% tungsten concentrate price declined form highest 78,000 RMB/ton to the current 72,000 RMB/tons, down by 7.7%. Supported by mine cost, when the capital is sufficient and traders and mining mentality is still good, the price will not decline sharply. The end of May and the beginning of June, some small mines have been recovery production and the products will gradually flow to the market this month, but the quantity of tungsten concentrate production is not large. The end of May, after concentrated to release a part of tungsten concentrates stock, the tungsten ore traders who are currently showing a little reluctant to sell it, so the price is stable. They are waiting for the right time.

The price of finished tungsten products which are made by tungsten powder also decline, affected by raw material price fell down. Although tungsten powder manufacturers price adjustment appeared late, but subject to the poor turnover, in the end of May they were forced to cut prices. At the beginning of May, when raw material price increased, tungsten carbide purchase willing has become increasingly weak, because it is very difficult for alloy product to increase the price. Besides, the cost of the alloy was gradually increased to the bearable breakeven line and many manufacturers unbearable to stand it, so some alloy companies decided to reduce the production to avoid the high cost production after the rapid rise. However, the price suddenly declined at the end of May, so tungsten carbide manufacturers do not worry to buy raw material. They can buy raw material as needed and turnover is little.

The price of APT decline range and speed is relatively large. From the highest 127,000 RMB/ton fell to the lowest 111,000 RMB/ton, drop by 12.6%. In the bulk market, traders faster adjusted the price and in the mid-May quick released a part of APT in the short term to maintain the early profit and can get the cash for circulation. However, APT manufacturers’ price adjustment is relatively cautious. They are focused on the long single-oriented transactions, making price change relatively modest. Whether the price increase or slight decline, APT price not only maintains a reasonable profit, but also surrenders part of the profits to manufacturers of finished tungsten product, having strong sense for maintain old customers. This week, APT decline range and speed became slow. There is not too much APT stock at the current price. Besides, the traders cut the prices for sale is fewer, and most of them holds wait and see attitude.

As we knew, tungsten market is in the stalemate situation. So whether in raw material or in finished tungsten products, the buyers and the sellers have both been stalemate.

This week tungsten market still has some good news been announced. The guide price of Minmetals and prediction average price of Ganzhou Tungsten Industry Association which often release on 5th of every month this month will be re-released after the eight tungsten enterprises meeting on June 7, 2016.

June 7, 2016 the eight largest tungsten mining enterprises will gather in Chaozhou to hold the third meeting, and the topic will focus on "production reduction, production limitation, quoted price". Tungsten market has high degree concern on this meeting, because after the first two meeting, market confidence has been greatly boosted and the meeting can well reflect the market price. The effect of this meeting is still worth to wait, but in the off-season June, July and August, the probability of prices rise sharply is small, but the probability of price maintain in the cost line is large.

The price of tungsten at the end of May price increase came to an end, and has started to slight decline. The main reason is tungsten concentrate and other raw materials price has declined lacking of motivation, so it drops tungsten alloy prices to decline. Beside, the steel market price is declining sharply and the demand is shrinking, resulting in tungsten-based product price slight fell down. In addition, the upcoming meeting of tungsten enterprises, the market is now relatively calm. Manufacturers are waiting for the meeting results for their further action. It is expected that tungsten raw material and tungsten finished product prices will temporarily shrink in the future. There are many China leading tungsten enterprises scheduled on June 7 gathered in Chaozhou, Guangdong, to discuss the company’s production status and current and future situation of tungsten market, and the leading companies including Minmetals, Jiangxi Tungsten Industry Group, Xiamen Tungtsen and so on.

According to statistics, China has been represented 23% of the world's total rare earth reserves, 47% tungsten reserves, and supplied 90% rare earth products for the international market for a long time. Xihua Mountain is the oldest tungsten mine in China, has been described as pedigree of chinese tungsten industry. After one hundred years of mining history, Xihua Mountain has made outstanding contributions for new China exports, development of special steel industry. However, with the gradual depletion of mineral resources, the development of the area has lagged behind its surrounding area in recent years. Because the unreasonable exploitation of tungsten ore resources is not only an outflow of wealth, but also a serious damage to the environment.

Tungsten ore resources belong to rare earth that is an important strategic non-renewable resource. It is an important raw material to new energy vehicles, missile defense systems, wind turbines, smart phones and other technology products. Chemical properties of tungsten are stable, at room temperature it would not react with air and water. Although China's rare earth is one of the largest storage country in the world, but 90% of tungsten resources in international markets are provided by China, resulting in a rapid decline of rare earth resources in China. China gradually made corresponding measures to solve these problems. In 2011, the government had issued the "Opinions on Promoting the Sustainable and Healthy Development of Rare Earth Industry." Therefore, China continues to strengthen the regulation of the tungsten ore mining in recent years, production tungsten heater will also reduce, although the tungsten resources is gradually exhausted, but until 2012, resource-based enterprises are more than 35 enterprises, accounting for 57.1% of the total number of the enterprise. Therefore, the regulation the tungsten mining will have an impact on the tungsten heater production and prices, but the industry still has good prospects for development.

Aero engine is a one of the most difficult cutting-edge technology to be conquered in aviation fields. For decades, domestic researchers have been unable to fully grasp the researchers of modern aviation engine production and development. The most important reason is in the process of material manufacturing, such as low production and quality level in high-temperature alloys and tungsten carbide. The core indicator of aero engine is thrust-weight ratio, and in order to improve the thrust-weight ratio, we should ensure the capacity of high-temperature turbine blade material improved. Every increase of temperature of 100 degrees Celsius, thrust-weight ratio can be increased by 10%.

In general, a military turbine engine in which a majority of funds invested into research and development of materials. The main structure of aircraft engines, the application of large parts of high-temperature alloys and tungsten carbide, and their manufacture are inseparable from the participation of a rare earth metal. China’s rare earth reservation is the first place in the world, but relatively small reservations of rare metals in the manufacture of high-end aero engine indispensable Ni, Co-based alloys and other long-term controlled by others. But the kinds of situation is expected to be broken, a domestic Molybdenum price $ 2.65 billion from the international mining giant acquired a 56% stake in the largest copper and cobalt Congo (DRC), the mine bears more than 28 million tons of copper and 300 tons of cobalt ore, with an annual capacity of 20.4 tons of copper and 16,000 tons of cobalt., reported by Reuters.

Broadly speaking, tungsten carbide is one of super hard materials made of the hard refractory metal compound and binder phase produced by powder metallurgy process (Powder Metallurgy, PM). From the narrow sense, usually refers to tungsten carbide WC-Co alloy, which has high hardness, high melting point, high strength and excellent wear and corrosion resistance. Even at 1000 ℃ still have high hardness, which can be widely used in cutting tool material, such as turning, milling, planer, drill, boring knives for cutting cast iron, nonferrous metals, plastics, chemical fiber, graphite, glass, stone and ordinary steel can also be used to cut the heat material difficult to machine steel, stainless steel, high manganese steel, tool steel. Take Co as an example, it is a key ingredient in the production of high-temperature alloys, tungsten carbide wear and other materials with wear and corrosion resistance. So it has a broad prospect in military and aero industries, such as armor-piercing ammunition, armored vehicles, aerospace engine.

In June 7^th China large-scale tungsten mining enterprises will get together in Chaozhou to hold the third meeting. These enterprises has 27 affiliated mine, and more than 50% tungsten concentrate was produced by these companies’ affiliated mine. This is the third time meeting from November 2015 to February 2016.

The first meeting of eight tungsten companies were held in Xiamen,Fujian in November 2015 when tungsten price was decline sharply and the whole economical situation is not good. In this meeting, they decided to limit tungsten concentrate production by 20%, till the end of January 2016 stopped to supply tungsten concentrate. The one of tungsten mines which supplies the larges tungsten concentrate in China domestic market stopped supplied these raw materials within two months, so the market was short in supply and the raw material was tension. Supported by these large-scale companies, other companies also stopped to produce tungsten raw material. Over the course of a month the price sharply rebounded, to mid-December, 2015, tungsten concentrate price reached 65,000 RMB / ton, and monthly price raised was 15,000 RMB / ton.

The second meeting was held in Guangzhou in February 2016. At that time tungsten concentrates was 65,000 RMB for each ton. But when the Spring Festival was coming the market demand was poor, and many companies needed cash for circulation, so they needed to sale the raw material for cash circulation and the price went to fell down. In addition, the market confidence frustrated once again and tungsten concentrate prices dropped again. Based on this, the eight tungsten enterprises in Guangzhou was decided reduced 2016 tungsten concentrate domestic production by 15%, and in February the price was 75,000 RMB for each ton. Besides, these companies actively participated in the State Reserve Bureau purchasing and storage business, which was good for tungsten market recovery. As we knew, at the beginning of 2016, the market situation was not good and the market demand did not improve, so the price went up supported by raw materials limitation and tungsten mine slow re-production. When tungsten concentrate supply became tension, then the tungsten concentrate price increased which raised 10,000 RMB for each ton. In May 2016, the price of tungsten concentrates was more than 75,000 RMB for each ton.

June 7, the third meeting of the eight tungsten companies will be held in Chaozhou. Currently tungsten price is continues to fall down, so this meeting plays an important significant for tungsten market recovery. In Eight tungsten companies, there are five companies produce the whole tungsten products which is form tungsten concentrate to finished tungsten products. Two companies produce raw material to melting products and only one company produces tungsten ore. In addition, from the nature point of view, there are two state-owned enterprises and two private enterprises. From the industrial point of view, the companies who run a whole production chain can withstand high-risk and has diverse profit model, but tungsten ore losses will directly affect the company's profits and direct damage to the core interests. On the other hand, the state-owned enterprises will take on more social responsibility and positive response to the government to protect the important task of national strategic resource, but also be able to take a good hope to recover tungsten market and to increase tungsten concentrate prices.

The first two meetings play an important role on tungsten market recovery, so the 3^rd meeting is expected to boost tungsten market confidence, soothing pessimism. In this meeting, they will introduce the positive measures to promote the market including limit production, support value, restricted selling and so on. And China government may introduce relevant policies to promote market and the government will continue to promote tungsten concentrate purchasing and storage plan.

It is expected that the tungsten price will slight increase after this meeting, but it will not increase sharply, and this is mainly because of the late summer market demand is light. Besides, if the price is too high will bring high-priced stock reflux to the market, making price fall down, so some the price should slight fluctuations on the basis of current price.

Tungsten market: the limit production of eight tungsten enterprises 3rd meeting will be held, and many manufacturers hold see and wait attitude. Affected by the whole economic situation, many tungsten manufacturers adjustment is insufficient, so there are little inquires. The whole tungsten market operates stable with slight decline.

Rare earth market: rare earth price is stable. At the eve of State Reserve Bureau meeting, secondary market is hot, but rare earth fundamental is stable without large change, which is a significant contrast. So the suppliers and buyers should clam down and wait and see.

Molybdenum market: international molybdenum price continues to fall down, and China domestic price is stable. The whole turnover of molybdenum is not too much, many manufacturers hold see and wait attitude, so the market at the stalemate situation, it is expected that the price has possibility to go up. 

Currently, there is only less than a month before the referendum for withdrawing from the European Union of Britain. The EU is an economic-political union of 28 member states that are located primarily in Europe. Every country maintains a positive attitude to this referendum, and the majority of investors believe that the chance to withdraw from the EU of Britain is small. Since British Prime Minister David Cameron announced that referendum would  be held in June 23, the pound has been in a state of sharp fluctuations, showing that the event is bound to bring about a crisis for the international economy. So if Britain really withdraws from the European Union, will it have any effect to China. The following are briefly discussions.

Firstly, the European debt crisis that broke out before has brought a great impact to China's economy, however, if Britain whose economic trends is better decides to draw out EU at present, which is bound to hamper the recovery of EU economy, even it can lead to the setback of EU economic. In this situation, EU will want to take a more protectionist policy in international trade, which would hinder bilateral trade between China and the EU countries. Thereby impeding the export of tungsten heater to European countries.

Secondly, if Britain withdraws from EU, Britain cannot be constrained by many policies of this organization, and then the related research on high technology of Britain will be unhindered flow into China. Therefore, it would hit many domestic related industries, which will have a negative impact on the development of related businesses in China. And some enterprises which produce tungsten heater may be eliminated because of the backward technology. On the other hand, the pound may depreciate because of the exit, while in the process of RMB internationalization is accelerating, which will lead to the foreign exchange market turbulence.