China's Tungsten Industry Maintains a Stable Operating Situation

China's tungsten industry has generally maintained a stable operating situation. The output continued to grow steadily, the export remained high, the price fluctuated slightly, and the economic benefits of the company continued to improve. The economic benefits of downstream smelting and processing enterprises in the tungsten industry continued to grow. In the third quarter, the operating pressure of enterprises in the tungsten industry increased, and the growth rate of economic benefits declined.

Steady growth in output

In recent years, China's tungsten resource grades have declined, mining costs have risen, small-scale tungsten mines are still difficult to resume mining, production of mineral processing enterprises continues to shrink, and new tungsten mining licenses are still under control, and resource and environmental constraints are strengthened. The trend of steady and declining concentrate production shows. According to the statistics of China Tungsten Industry Association (hereinafter referred to as “China Tungsten Association”), in the first three quarters of 2018, the output of tungsten concentrates of 41 major tungsten mining enterprises was 54,545 tons (US 365%), an increase of 2,844 tons, an increase of 3.85%. Among them, the output of 23 enterprises increased by 5,489 tons, and the output of 18 enterprises decreased, reducing 2,645 tons.

At present, market inventories are still at a low level, market demand continues to grow, and the output of downstream smelting and processing products generally shows a growth trend. The innovation speed of cemented carbide tools is accelerating, new grades, new coatings and new structures are emerging, and the output and export volume of cemented carbides are growing. Especially the high-end carbide CNC blades are growing strongly, and the industrial structure is moving towards the mid-to-high end. Industrial transformation and upgrading have accelerated. According to the statistics of China Tungsten Association, in the first three quarters, the output of major tungsten smelting and processing enterprises APT, tungsten oxide, tungsten powder and tungsten carbide increased by 3.30%, 2.00%, 4.20% and 9.72%, respectively; the output of cemented carbide increased by 13.99%. The output of high-grade cemented carbide CNC inserts increased by 32.56% year-on-year; the output of forged tungsten rods (rods) and tungsten tantalum increased by 16.21% and 40.96%, respectively; ammonium tungstate (containing tungstic acid) and unwrought tungsten strips (rods) ), crude tungsten wire, high specific gravity alloy, tungsten electrode and ferro-tungsten production decreased by 26.68%, 4.97%, 17.84%, 8.96%, 15.66 and 2.46%, respectively.

The growth rate of export tungsten products slowed down and remained high

According to the statistics of China Tungsten Association, in 2017, China exported 35,401 tons of tungsten products (including hard alloys and metal parts), a year-on-year increase of 27.29%, a record high since 2008. Among them, exports of cemented carbides of 6,417 tons (amount of metal), an increase of 11.78%, a record high, 5.8 times in 2000, exports of 380 million US dollars, an increase of 12.43%.

Affected by market expectations such as Sino-US trade friction and increasing global economic growth pressure, the growth rate of China's export tungsten products slowed down significantly in the third quarter of 2018, but remained at a relatively high level. According to the statistics of China Tungsten Association, the cumulative export of tungsten products in the first three quarters was 29,145 tons (including hard alloys and metal-dosing), an increase of 1.07% over the same period of last year. The growth rate was 13.87 percentage points lower than that of the first half of the year; in the first three quarters, China’s cumulative export volume was 1.385 billion. The US dollar increased by 39.70% year-on-year. The growth rate was 24.69 percentage points lower than that of the first half of the year. Among them, 5462 tons of hard alloys were exported (amount of metal), up by 17.55% year-on-year. The growth rate was 3.29 percentage points lower than that of the first half of the year; the export volume was 406 million US dollars. The growth rate was 28.95%, and the growth rate was 10.56 percentage points lower than that in the first half of the year.

The price fluctuated slightly and the overall price stabilized

In 2003, domestic tungsten concentrate prices began to rise, from 18,000 yuan / ton in 2000 to 24,500 yuan / ton, followed by shocks and rebounds, the average monthly price in May 2005 soared to 132,000 yuan / ton, 2006 The average annual price has exceeded 100,000 yuan/ton, and the average annual price in 2011 has reached a historical high of 137,600 yuan/ton. After several shocks, the current rational return to a relatively reasonable operating range of 100,000 yuan / ton (see Figure 1).

In the first three quarters of 2018, the market supply and demand was stable. Due to the slowdown in the demand of the international tungsten market, the tungsten market price fell in July, but the upstream and downstream tungsten market prices generally stabilized.

In the first quarter, the average price of domestic tungsten concentrate was 111,500 yuan/ton, up 5.05% from the previous month and up 52.04% from the same period of last year. The average price of domestic tungsten concentrate in the first half was 111.10 million yuan/ton, up 8.28% from the previous month and up 43.33% from the same period last year. In the quarter, the average price of domestic tungsten concentrate was 102,800 yuan/ton, down 7.68% from the previous month and up 3.73% year-on-year. In the first three quarters, the average price of domestic tungsten concentrate was 108,300 yuan/ton, up 27.86% year-on-year (see Figures 2 and 3). ).

In the first quarter, the domestic average price of APT was 172,600 yuan/ton, up 5.00% from the previous month and up 52.47% from the same period of last year. The average price of domestic APT in the first half of the year was 174,400 yuan/ton, up 9.78% from the previous month and up 46.07% from the same period of last year. The average price was 165,300 yuan / ton, down 5.76% from the previous month and up 8.25% year-on-year. In the first three quarters, the average domestic APT price was 171,100 yuan / ton, up 31.31% year-on-year. APT prices rose more than the price increase of tungsten concentrates due to the suspension of APT companies (see Figure 4).

In the first three quarters, the European APT offer for the London Metal Herald (MB) fluctuated between $275 and $354/ton, with a maximum volatility of 28.73%. It fell below $300/ton on August 25, stabilized at $275-$290/ton in September, and raised to $275-$295/ton on October 19. In the first quarter, the average price of APT in Europe was US$321.80/ton, up 12.16% from the previous month and up 58.67% from the same period of last year. The average price of APT in Europe in the first half of the year was US$330.31/ton, up 20.12% from the previous month and up 57.33% from the same period of last year. The average price was 307.50 USD/ton, down 9.24% from the previous month and up 16.90% from the same period of last year. In the first three quarters, the average price of APT in Europe was 322.71 USD/ton, up 41.76% year-on-year (see Figure 5).

Economic efficiency growth slowed down

China's tungsten industry process technology and equipment level, product quality and grades, as well as the world's influence has been continuously improved, has entered the world's tungsten industry development first, is in a critical period of high-end development. The investment in smelting and processing projects is oriented towards advanced technology, green environmental protection and high-end tungsten products. The project has a high starting point, large investment, and standardized management, especially for high-end cemented carbide rods, CNC blades and tools. The overall quality and efficiency of the industry will gradually increase.

In the first three quarters of 2018, the tungsten industry maintained a stable operation overall, with steady growth in output, high export prices, small fluctuations in prices, and continued improvement in economic efficiency. In the third quarter, affected by the Sino-US trade war and the downward pressure on the global economy, the overall economic efficiency of enterprises has declined.

According to the statistics of China Tungsten Association, in the first three quarters, 122 major domestic tungsten enterprises achieved operating income growth of 20.28% year-on-year, a slowdown of 5.73 percentage points over the first half of the year; profits and taxes increased by 36.96% year-on-year, a decrease of 2.06 percentage points over the first half of the year; The total amount increased by 41.67% year-on-year, and the growth rate was 14.27 percentage points lower than that of the first half of the year. The profit growth of tungsten mining enterprises has been greatly slowed down compared with the first half of the year, and the economic benefits of downstream smelting and processing enterprises continue to grow. Among them, the profit of tungsten smelting enterprises increased by 14.40% year-on-year, the growth rate was 20.91 percentage points higher than that of the first half of the year, and the growth rate was negative. The profit of cemented carbide enterprises increased by 18.12% year-on-year, and the growth rate was 2.64 percentage points higher than that of the first half.

Excluding two incomparable data, in the first three quarters, of the 120 companies, 100 were profitable (66 gains, 17 cuts, 17 losses turned), 20 losses, 16.67% of losses, the loss ratio In the half year, it was reduced by 0.98 percentage points.

Market outlook

From the domestic market, the supply of tungsten raw materials has stabilized, demand has continued to grow, and the trend of tight supply has not changed. With the delineation of the ecological protection red line and the strengthening of tungsten mine development management, tungsten smelting pollution prevention, environmental protection tax and resource tax law, etc., at the same time, due to the rigid increase in tungsten mining costs, and the decline in tungsten ore resource grade, tungsten The impact of mining and mining expansion and mining rights control, resource and environmental constraints continue to increase, the trend of domestic tungsten concentrate production steady decline is more obvious. China's economy is generally stable, structural adjustment has been further advanced, new and old kinetic energy have been continuously transformed, quality and efficiency have been steadily improved, manufacturing purchasing managers' index has continued to remain in the expansion range, high-tech industries and equipment manufacturing industries continue to grow, with manufacturing restructuring and products. The continuous advancement of upgrading, the growth of strategic emerging industries, and the investment in infrastructure construction will continue to drive demand in the tungsten market. Domestic demand in the tungsten market will continue to grow, but the growth rate will slow down.

From the perspective of foreign markets, foreign production mines have not resumed production, new projects have been slow to advance, tungsten concentrate production has remained stable overall, foreign reserves and stocks have remained at a low level, and the market supply has not changed. The United States imposes tariffs on tungsten products downstream of China's export of cemented carbide blends. The direct impact on China's exports of tungsten products to the US market is limited, but its indirect impact should not be underestimated. Affected by Sino-US trade friction, the uncertainties in the international tungsten market will increase and the risks will increase. The domestic tungsten market demand and the export of downstream tungsten deep processing products will be affected.

China's tungsten industry policy and supply and demand in the tungsten market are still the key factors affecting the global tungsten market. Overall, the production of tungsten concentrates abroad is stable. Domestic tungsten mining is subject to policy control, resource endowment, mining cost, and safety and environmental protection. It will effectively support the supply and demand of tungsten market and the stability of prices. In the future, the tungsten market price will generally stabilize. Slightly oscillating operation.

Challenge

China's tungsten industry is in a critical period of high quality development. As the overall price of tungsten concentrate has not recovered and stabilized to a reasonable level of mining costs, some tungsten mining enterprises are still losing money, and the profitability of tungsten enterprises is intensifying. The foundation of the industry's economic situation needs to be further consolidated. There are still many uncertainties in the current market, and enterprises still face many difficulties and challenges in their production and operation.

The first is that the business environment facing enterprises is still complicated. On the one hand, with the deepening of the reform of “distribution management”, the transformation of government functions and the reform of the administrative examination and approval system, the implementation of policies such as negative market access list, environmental protection tax and resource tax, and the ecological protection red line. The laws and regulations on demarcation, safe production and environmental protection have strengthened the protection of tungsten resources and rational development and utilization, and the pressure on safety and environmental protection has increased. On the other hand, international environmental uncertainty factors have increased, global economic growth is under pressure, and pressure on tungsten exports is increasing.

Secondly, the resource crisis tungsten mine resource replacement is imminent. The tungsten mine mining process technology and equipment research and development and renovation and transformation of too much debt, mining and selection, mechanization, intelligence, low level of digital, high cost and low efficiency.

The third is that alkali-cooked slag, molybdenum-containing slag and wastewater treatment sludge generated by alkali decomposition in tungsten smelting process are classified as hazardous waste, and tungsten smelting pollution prevention and reduction, resource utilization and harmless utilization of tungsten slag are unprecedented. pressure.

The fourth is that the overall innovation ability of the industry is not strong, the coordinated development of the industrial chain is unbalanced, the industrial concentration is low, the overall competitiveness of the industry is not strong, the industrial structural contradiction is still outstanding, and the quality and efficiency of the industry development are not high.

policy suggestion

Implement the spirit of the 19th National Congress of the Communist Party of China, adhere to the development policy of “saving resources, protecting the environment, transforming and upgrading”, adhere to the development concept of “innovation, coordination, green, openness, and sharing”, and adhere to the principle of “innovation-driven, quality-first, green development, and The basic principle of “integration and open cooperation” is “Made in China 2025” as the action plan, with the core of improving development quality and efficiency, focusing on supply-side structural reform and expanding market demand, in order to promote resource integration and control mining. Focusing on strengthening technological transformation, eliminating backward production capacity, and breaking through development bottlenecks, promoting quality change, efficiency change and power change, comprehensively improving innovation capability, economic strength and international competitiveness, and achieving high-quality development of tungsten industry.

First, we must focus on the integration of equipment intelligence, production process automation and management informationization, accelerate the upgrading of tungsten mining equipment, promote the construction of digital and information mines, and form a new mining development that meets the requirements of ecological civilization construction. mode.

The second is to accelerate the digitalization, automation, intelligence and enterprise management information construction of tungsten smelting and processing enterprises, to create digital enterprises and smart high-end industries, and to promote high-quality and green development of tungsten smelting.

The third is to accelerate industrial transformation and upgrading, innovate corporate development strategies, respond to business changes in the new era, and comprehensively improve the quality, efficiency and competitiveness of China's tungsten industry. Aiming at the frontier of science and technology in the development of tungsten industry, strengthening basic research, realizing breakthroughs in forward-looking basic research and leading original achievements; focusing on intensive processing technology, green metallurgy technology, resource development and comprehensive utilization technology, heavy metal pollution prevention and control technology, etc. Solve the "bottleneck" problem that plagues the development of the tungsten industry, such as prominent structural contradictions and increased pressure on environmental protection.

Improve relevant laws and regulations on the development and utilization of tungsten resources

First, speed up the revision process of the Mineral Resources Law, establish relevant laws in line with the Mineral Resources Law, improve relevant policies and measures for the development and utilization of tungsten resources, strengthen policy guidance and supervision, and give better play to market regulation and government regulation. Role, scientific regulation of the "total gate" of tungsten resource allocation.

The second is to accelerate the study and formulation of the "National Strategic Mineral Resources Reserve Law", as well as the "Regulations on the Management of State Material Reserves" and "Administrative Measures on Mineral Reserves" and other relevant regulations and policy documents, establish a strategic reserve system for tungsten resources, and accelerate the advancement of tungsten mines nationwide. Pilot of mineral reserves.

The third is to gradually improve the mature and effective departmental regulations and normative documents into national regulatory documents, and gradually create a law-enforcement environment that “can be prohibited without law” and “enforce the law without authorization” and improve industrial policies. The execution of the company will effectively improve the business environment of the company.

Encourage and support the construction of tungsten resource crisis mine resource replacement projects and the upgrading of mining technology and equipment

China's tungsten mining has been in existence for 111 years. At present, there are 10 tungsten mines that have been mined for 100 years or more. The old tungsten mines are facing depletion of resources, and the mining rights of tungsten mines in the ecological red line are withdrawn. The replacement of tungsten mine resources is imminent.

First, the exploration of the deep side of the old mining area has achieved remarkable results. It should actively support the development of deep-side resources of the old mines and extend the service life of the mines. Policy support for existing exploration rights and prospecting rights that need to be integrated, or existing mining companies that are indeed depleted of resources within the scope of mining rights and use the original production system to expand the scope of exploration or adjacent areas of deep-side exploration To solve the historical problems of long-term accumulation of tungsten mines, maintain the stability of mining areas, and provide conditions and guarantee for the green development of tungsten mines and the transformation of mining.

Second, in accordance with the support policies of the central region's regional economic support policies and the State Council's poverty alleviation and development, the state economically underdeveloped tungsten ore resources will be conditionally approved for development, and support will be provided for the fight against poverty.

Third, due to historical reasons, China's tungsten mining and mining technology and equipment technology equipment development and renovation and debts are too much, the selection of mechanization, intelligent, low level of digital, safety and environmental protection pressure, excessive tax burden, high cost and low efficiency. Tungsten mine enterprises should be encouraged and supported to speed up the technological transformation of mining and selection, promote the construction of digital mines and green mines, improve the intelligence of mining and selection equipment, the automation of production processes and the level of management information, and accelerate the formation of a new mining development model that meets the requirements of ecological civilization construction. .

Encourage and support the promotion and application of green and efficient tungsten smelting technology to realize the green development of tungsten smelting

China's tungsten smelting technology is at the world's leading level, and smelting products are in a leading position in the international market. However, the current tungsten smelting process is mostly alkaline decomposition process. In 2016, the National Hazardous Waste List lists the tungsten slag, molybdenum slag and wastewater treatment sludge in the alkali decomposition process as hazardous waste. China's tungsten smelting industry faces unprecedented environmental pressure and challenge. In recent years, tungsten smelting technology has made great progress. For example, the new technologies of tungsten smelting such as sulfur-phosphorus mixed acid synergistic leaching, soda boil-alkaline extraction have been industrialized, and in terms of economic benefits and “three wastes” emissions, compared with traditional processes. There are major improvements. Therefore, while limiting the repeated construction of tungsten smelting capacity, enterprises should be encouraged to adopt green tungsten smelting new technology to implement technological transformation, actively adopt pollution prevention and control technical measures, prevent and reduce the amount of hazardous waste generated from the source, and minimize the degree of harm. Tungsten smelting green development.

Encourage and support tungsten resource conservation and intensive development and waste tungsten recycling

First, research and development and promotion of resource development and comprehensive utilization technologies, vigorously develop the circular economy of tungsten resources, build a long-term mechanism for resource conservation and comprehensive utilization, promote the construction of mineral resources conservation and comprehensive utilization demonstration projects, and improve the comprehensive utilization of resources.

The second is to encourage and support the recycling of secondary tungsten resources, such as the recycling of waste cemented carbide, tungsten-based high specific gravity alloy, tungsten, and grinding materials.

The third is to open up the disposal channels for tungsten slag as soon as possible. Accelerate the formulation and release of pollution control technical specifications and related standards for the utilization of tungsten smelting waste residue, improve supporting policies and measures related to tungsten smelting pollution prevention; encourage the development of comprehensive utilization technology of tungsten slag, accelerate the application and approval of tungsten slag utilization and disposal enterprises, and open up and dispose of utilization as soon as possible Channels to achieve the reduction, resource and harmlessness of tungsten slag.

Accelerate industrial transformation and upgrading, increase industrial concentration, and promote high-quality development of tungsten industry

The first is to improve the tungsten industry innovation system. Focusing on intensive processing technology, aiming at the technological frontier of tungsten industry development, strengthening basic research, and achieving major breakthroughs in forward-looking basic research and leading original results. Relying on national key laboratories, national tungsten materials engineering technology research centers and research institutes and other scientific and technological platforms, strengthen basic research and original technology development, select key directions and fields, focus on talents and funds, and focus on joint research; encourage backbones Enterprises and research institutes unite to build an integrated technological innovation system that takes enterprises as the mainstay, market-oriented, and combines production, learning, research, and use.

The second is to expand the application of tungsten terminals. Focusing on the research and development of tungsten deep processing products, we will strengthen research on common technologies and expand the application of tungsten in aerospace, defense, military, nuclear, microelectronics, rail transit, high-end equipment, precision machining and other fields.

The third is to cultivate new advantages in international competition. Support the reform and reorganization of large-scale key enterprises, form a tungsten deep processing industrial base with reasonable layout, distinctive characteristics and industrial clusters, improve resource and industrial concentration; innovate enterprise development strategy, establish international marketing network system and strategy of upstream and downstream users of industrial chain Cooperation mechanism to improve the quality and level of product supporting services; deep integration into the “One Belt and One Road” development strategy, accelerate the layout of areas along the “Belt and Road” and important areas, promote international capacity cooperation, promote the transfer of domestic tungsten smelting capacity, and enhance the industry in the international Market voice and ability to withstand market risks; adapt to business changes in the new era, enhance the ability to participate in global mining investment, industrial layout, scientific and technological cooperation, technical standards and trade rules, and promote the internationalization and globalization of China's tungsten enterprises Develop and cultivate new advantages in international competition.

Increase tax reduction and fee reduction, continue to reduce the burden of corporate taxes and fees

We will improve the tungsten tax resource tax policy, increase the tax reduction fees for tungsten enterprises, avoid double taxation, increase the export tax rebate for terminal tungsten products, effectively reduce the burden of corporate taxes and fees, support corporate financing, and reduce corporate financing costs. We will provide financial and tax support for the industrialization projects of high-end tungsten products and high-end equipment.