Tungsten and Molybdenum Industry Downturn in the Depth of Weak Run

According to the China Nonferrous Metals Industry Association jointly issued by the non-ferrous metals industry climate index report shows that 1 to 2016 1 to 6 months, China's monthly non-ferrous metals industry monthly prosperity index showed a rising trend, from 13.1 in January continued to rise to June Of 20.2, but the recent rebound in the rate of decline, indicating that the basis for recovery is not strong industry. The first half of the non-ferrous industry from the "cold" gradually rose to "cold" range, showing that China's non-ferrous metals industry as a whole has picked up, but still showed a low run.
 
The first half of 2016, the overall operation of China's tungsten and molybdenum industry trends and non-ferrous metal industry trends compared to performance is more weak, is continuing to run low pressure, mainly reflected in:
 
Investment and production are under pressure to reduce the enthusiasm
 
2016 1 to 5 months, China's tungsten and molybdenum mining investment in fixed assets rose 3.76% year on year, molybdenum smelting investment in fixed assets fell 24.61% year-on-year, showing that industry investment is still low. In the context of long-term market weakness, the upstream resource extraction and smelting projects as a result of sharp contradictions between supply and demand difficult to secure income, a great blow to the industry investment enthusiasm. Moreover, the price of tungsten and molybdenum concentrate below most of the impact of production costs, production enthusiasm is also greatly affected. According to statistics, from January to May 2015, China's tungsten concentrate production of about 23,000 tons of metal, down only 4%, and the domestic private tungsten mine has been basically cut-off; molybdenum concentrate production is about 49,300 tons of metal, Down 5.09% year on year, mainly due to the long-term downturn in molybdenum prices, a quarter of Heilongjiang Yichun Luming molybdenum mine and Inner Mongolia medium-sized mines (including Western Mining and Ao Lunhua mining) are not produced. At present, large enterprise groups control the vast majority of the market share is the main feature of China's tungsten and molybdenum industry, in the market downturn, the enterprise to maintain the production of power was insufficient, a large number of high-cost small and medium mining enterprises have entered the shutdown state, Smooth production of large enterprise groups is to maintain the relative stability of the total output of the main support.
 
Weak domestic and international market demand
 
Customs data show that this year China's exports of tungsten products remained stable. 1 to 5 months of China's tungsten exports rose 0.8% to 7876 tons of metal, due to a serious decline in exports over the same period last year, indicating that China's tungsten exports in the first half of this year is still low. Over the same period, China's molybdenum exports grew 31.7% year on year to 5033 tons of metal, but still in recent years low. Molybdenum exports in the first half year-on-year growth and the international price of molybdenum fluctuations and the RMB exchange rate has some relationship. From the export point of view, the first half of molybdenum products (such as molybdenum oxide and molybdenum concentrate) almost all of the re-exports, indicating that overseas demand and no significant growth. In addition, imports of tungsten and molybdenum products rebounded, 1 to 2016, China's imports of tungsten products increased by 8.3% to 1416 tons, molybdenum imports increased 82.8% to 5100 tons of metal. Molybdenum imports year-on-year substantial growth and the domestic mining enterprises cut off lead molybdenum feedstock stage shortages. Consumption of domestic market, 2016 in the first half, China's tungsten consumption of about 14,000 tons of metal, down 10%, molybdenum consumption is up 7% to 3.32 million tons of metal. Since 2012, China's annual growth rate of tungsten and molybdenum consumption has dropped to below 3%, this year the overall consumption remained at a low level, is due to China's steel industry, carbide industry and other downstream industries depth adjustment .
 
Quotes decline, a significant decline in business efficiency
 
APT average price of 106,000 yuan / ton, down 16%; over the same period the average price of molybdenum ore in China fell 22.7% over the same period last year, the average price of China's iron ore prices fell by 17% To 850 yuan / ton, the average price of molybdenum fell 18.3% year on year to 6.28 million yuan / ton. This year, China's price of tungsten and molybdenum Xianyanghouyi, the current market price has been lower than most of the production costs of enterprises. Affected by this, China's tungsten and molybdenum industry operating efficiency decreased significantly. In the period from January to May 2016, the revenue and profit of the main business of tungsten and molybdenum mining in China decreased by 9.1% and 4.5%, respectively, and the trend of concentrating profits to the mining enterprises changed significantly. Meanwhile, the income and profit of the main business of tungsten and molybdenum smelting Respectively, down 2.26% year on year and 24.3%, showing significant structural differences in efficiency.
 
In short, since 2016, China's tungsten and molybdenum industry, the main features of the operation: the industry investment and production incentives are reduced pressure, domestic and international market demand is still weak, tungsten and molybdenum prices continued to decline, significantly reduced business efficiency. The future, with the steady growth, promote reform, restructuring, and benefit the implementation of the series of policies to refine the people, domestic production and consumption of tungsten and molybdenum industry remained relatively stable will remain the main theme. As steel and carbide and other downstream industries are still in the depth of adjustment, the market demand is difficult to have significant growth, which will lead to China's tungsten and molybdenum industry in the second half of 2016 continue to run low.