Tungsten Business Shouchu Fund was established, the price of tungsten is expected to significantly upward

Luo molybdenum announcement that the proposed scale of not more than 3 billion yuan to set up a tungsten business Shouchu special fund be used for tungsten concentrate price commercial purchasing and storage, purchasing and storage is expected to total no more than 46,000 tons, accounting for the total domestic tungsten concentrate yield 1/3. This means that the industry's first commercial support for purchasing and storage fund was established specifically tungsten, tungsten price downturn is expected to inject a shot in the arm.

Tungsten price in the doldrums, more cost-effective mine Shouchu previous close. By the downstream demand downturn, tungsten prices continued downward, currently wolframite (65%) of the price is only 79,000 yuan / ton. Most of the tungsten ore into the loss, the equivalent of a low cost of purchasing and storage enterprises business acquisitions tungsten resources, help strengthen the domestic tungsten resources industry pricing, while countries also support domestic resources for strategic purchasing and storage business in order to stabilize prices.

Large-scale purchasing and storage business, is expected to be a substantial increase in tungsten concentrate prices. Commercial purchasing and storage size Moly special fund set up by $ 3.0 billion, is expected to total purchasing and storage of about 46,000 tons, accounting for the total domestic production of tungsten concentrate into three. Although the completion of the acquisition of time yet, but a large purchase will significantly reduce the consumption of tungsten concentrate into the downstream areas, projected future flow of tungsten concentrate market will be tight, prices are expected to rise significantly.

Tungsten concentrate price elasticity of supply is low, without worrying about the impact of price increases caused by production. Mainly by two factors: on the one hand the supply of highly concentrated industry, Chinese tungsten resources accounted for just 85% of the global total, has an absolute monopoly of global resources, more important is the domestic resources are concentrated in Minmetals Jiang W Holdings, China Molybdenum, Xiamen Tungsten, Tungsten chapter five enterprises in the hands, is expected to exceed the total resources accounted for more than 90%, of which domestic tungsten ore resources Minmetals control over 58% of total global reserves nearly 40 percent of high industry concentration; two countries in recent years to rectify the illegal mining of tungsten and effective measures to significantly reduce the illicit manufacture, and easy to enter the exhaustion of mining resources, reboot the high cost of illegal mines. Overall, therefore, even if the future prices rose sharply, illegal mining is difficult to form a large market impact.

And state purchasing and storage at the beginning of 2013 have quite different points, the higher the price of purchasing and storage flexibility. Currently prices are below the cost and scale of purchasing and storage of far more than last time, but the stage is not the same industry, so we judge the tungsten concentrate price elasticity will be higher.


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