Since April, the price of tungsten metal, known as the "industrial tooth", has continued to rise. According to Wind data, on May 13th, the average price of 65% grade tungsten concentrate in Jiangxi reached 153500 yuan/ton, an increase of 21.34% compared to the price of 126500 yuan/ton on April 1st, an increase of 25.58% from the beginning of the year, and a new high since 2013.
Tungsten is an extremely scarce and irreplaceable strategic resource, with properties such as high melting point, high hardness, high density, good conductivity and thermal conductivity, and small coefficient of expansion. Tungsten based hard alloys are known as the "teeth of industry" and are widely used in military, aerospace, mechanical processing, metallurgy, drilling, mining tools, electronic communication, construction and other fields. Tungsten wire is a key material in industries such as lighting, electronics, and photovoltaics.
Global tungsten resources are relatively abundant, but mineralization is relatively concentrated, with tungsten reserves and production concentrated in a few countries.
According to USGS statistics, the global tungsten resource reserves reached 3.8 million tons (metal content) in 2022, mainly concentrated in countries such as China (47.4%), Russia (10.5%), Vietnam (2.6%), and Spain (1.5%). China's tungsten reserves account for nearly half of the world's total, making it the country with the richest tungsten reserves in the world.
According to USGS statistics, the global tungsten resource reserves reached 3.8 million tons (metal content) in 2022, mainly concentrated in countries such as China (47.4%), Russia (10.5%), Vietnam (2.6%), and Spain (1.5%). China's tungsten reserves account for nearly half of the world's total, making it the country with the richest tungsten reserves in the world.
Meanwhile, China is also the country with the richest tungsten production in the world. According to the US Geological Survey (USGS), the global tungsten production in 2022 was 84000 tons, of which China produced 71000 tons, accounting for approximately 84.5% of the total global production.
Since 1999, China has suspended the issuance of tungsten mining licenses. In 2002, China officially began to control the total amount of tungsten mining, effectively curbing the problem of excessive growth of mining output, and strengthening the pricing position of China's tungsten resources.
However, China's global tungsten production accounts for a much higher proportion than its reserves, and the consumption rate of tungsten resources is still too fast. Especially for high-grade and easily exploitable scheelite, it may face the problem of rapidly increasing mining costs. At the same time, in the process of allocating production indicators to local governments and enterprises, there is a situation where the indicators are not strictly followed. In 2019, the national tungsten concentrate (WO3 65%, the same below) mining indicator was 105000 tons, and the actual tungsten concentrate production in that year reached 145400 tons, exceeding the indicator by 40400 tons. In recent years, although overproduction has been decreasing year by year, the problem of overproduction still persists.
In March of this year, the Ministry of Natural Resources issued the first batch of tungsten mining total control targets for 2024, which were only 62000 tons. The contraction of the scale means that the domestic tungsten concentrate production will continue to decline. With the gradual tightening of industry policies such as total quantity control, export quota management, and national tightening of tungsten resources in China, it is expected that global tungsten supply will gradually tighten in the future, and the growth rate of tungsten production will gradually slow down.
According to the China Business Intelligence Network, in 2022, the application of hard alloys accounted for 58% of China's tungsten industry applications, making it the largest downstream application field in China's tungsten industry. Tungsten based hard alloys have excellent hardness and wear resistance, and can be used to manufacture various cutting tools, cutting tools, drilling tools, and other components. They are widely used in modern industries such as mechanical processing, aerospace, military defense, and electronic information.
The supply side is tightening, and the recovery of downstream manufacturing industry has led to a gradual increase in hard alloy consumption, supporting the rise in tungsten prices.
In addition, tungsten wire has advantages such as wear resistance, high strength, and low wire breakage rate, providing greater space for fine wire production. Against the backdrop of a long photovoltaic business cycle, photovoltaic fine tungsten wire replaces steel wire diamond wire for clear transmission lines, providing a new direction for high value-added applications downstream of tungsten. Domestic manufacturers have been laying out photovoltaic tungsten wire, and Xiamen Tungsten Industry has pointed out that this field is currently in short supply. With the advancement of the "dual carbon" goal and the accelerated rise of new energy, the demand for tungsten products is expected to experience explosive growth, adding further support to the price increase.
Price increases may continue!