China Eight Tungsten Enterprises 3rd Meeting Will be Held to Promote Tungsten Market

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. 

• < Prev
• Next >