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Tungsten and molybdenum industry market demand recovered significantly

  • Mosten
  • 24 May

Monitoring results of monthly climate index of China's tungsten and molybdenum industry show that in March 2021, the climate index of China's tungsten and molybdenum industry was 41.9, 4.3 points higher than that of the previous month, and it continued to rise for 9 consecutive months, operating in the "normal" range. The leading composite index was 69.6, rising continuously.

Industry situation
(1) Price trend: in March 2021, the price of tungsten concentrate showed a trend of first rising and then falling. Since the end of November 2020, the domestic tungsten market has been steadily declining and rising. In the first quarter, the tungsten market has basically continued its rising trend, and in the end of March, the tungsten market has been slightly adjusted back. The average price of domestic tungsten concentrate in March was 95,000 yuan/ton, up 3% month-on-month and 5.6% year-on-year. APT's average price was 145,000 yuan/ton, up 4.5% month-on-month and down 5.9% year on year.

In March 2021, the price of molybdenum concentrate generally showed a downward trend. In March, the average price of molybdenum concentrate in China was 1737 yuan/tw, up 9.0% month-on-month and 14.3% year-on-year. The average price of ferric molybdenum was 113,000 yuan/ton, up 6% month-on-month and 10.8% year-on-year.

(2) Growth of tungsten and molybdenum production: from January to February 2021, the domestic output of tungsten concentrate was 18,000 tons, up 29.5% year on year. In January-February 2021, the molybdenum concentrate output was 33,000 tons, up 0.6% year on year.

(3) Year-over-year growth of tungsten and molybdenum exports: according to customs statistics, China exported 1,388 tons of tungsten products (equivalent to tungsten, the same below) in February 2021, down 9% from the previous month, mainly due to the impact of the Spring Festival holiday. From January to February, the total export volume was 2,913 tons, up 22.5% year on year. In terms of classified products, the export volume of tungsten smelting products was 1,278 tons, up 25.1% year on year. Tungsten powder exports of 1,250 tons, up 21.6% year on year; Tungsten exports were 385 tons, up 16.9 percent year on year. It is estimated that the export of tungsten in the first quarter is 4,913 tons, up 12.3% year on year. In January 2021, China exported 785 tons of molybdenum products and 1,120 tons of molybdenum products in February, increasing for two consecutive months. It is estimated that the first quarter export molybdenum 3405 tons.

(4) Operation of tungsten and molybdenum mining and smelting: from January to February 2021, the operating income of tungsten and molybdenum mining and smelting enterprises is 4.92 billion yuan, and the total profit is 270 million yuan. From January to February 2021, the operating income of tungsten and molybdenum smelting enterprises is 9.33 billion yuan, and the total profit is 1.35 billion yuan.

Market demand has recovered significantly:
From the perspective of the tungsten industry, in the first quarter of 2021, from the Spring Festival to the "two sessions", the tungsten mine stopped production for maintenance, together with the safety inspection, tungsten concentrate production was affected to some extent, and the production of tungsten concentrate was basically normal in late March, and the supply of tungsten market returned to the right track. In addition, the self-discipline of China's tungsten industry has been further improved to maintain market stability consciously. In terms of demand, exports in the first two months increased significantly compared with the same period last year. However, the impact base of last year's epidemic was relatively low, and exports have not yet recovered to the previous level. Demand for tungsten products, such as cemented carbide, will be driven by an improving domestic economy and increased production in the automobile and steel industries. It is estimated that the domestic consumption of raw tungsten in the first quarter of 2021 is 11,000 tons, up 10% year on year. At present, the production of special steel has resumed. According to the production data of special steel, in the first two months, the production of high-quality alloy steel reached 1.36 million tons, up 20.4% year on year. According to the data of the Association of Automobile Manufacturers, in February, the production and sales of automobiles reached 1.503 million and 1.455 million units respectively, up 4.2 times and 3.6 times respectively year on year. Looking ahead, the domestic supply of tungsten concentrate is basically normal. Although the market price of tungsten dropped for a time in late March, it soon stabilized the decline. Under the situation of stable supply and gradually improving demand, there is less possibility of the tungsten market falling in the next quarter. It is estimated that tungsten concentrate price is 95,000 yuan/ton and APT price is 143,000 yuan/ton.

From the perspective of molybdenum industry, in the first quarter of 2021, domestic molybdenum market demand performed well. From the perspective of steel mill procurement, steel mill procurement in March purchased 9305 tons of iron molybdenum, an increase of 60% month-on-month and 9.2% year-on-year. In the first quarter of 2021, China's demand for ferromolybdenum was 26,000 tons, up 36.1% year on year. According to statistics, in the first quarter of 2021, the global consumption of molybdenum was about 63,000 tons, up 8% year on year. Among them, China consumed about 26,000 tons of molybdenum, up 24.4 percent year on year. From the primary consumption of stainless steel field, January-February domestic stainless steel production of 5.29 million tons, up 28.7% year on year. According to the China Association of Special Steel Enterprises, the crude steel output of its members in the first one to two months totaled 268.2 billion tons, up 13.2% year on year. At present, special steel production has recovered to the level before the epidemic, its demand for molybdenum products continued to pick up. From the perspective of the automobile industry in the field of terminal consumption, according to the statistics of China Association of Automobile Manufacturers, influenced by the low base in the same period, the automobile production and sales showed a rapid year-on-year growth, and the industrial added value of the automobile manufacturing industry also showed a rapid year-on-year growth momentum. It can be seen that the situation of the epidemic in China is good, consumer confidence has been improved, and the pent-up demand of some consumers has been released at a faster pace. The auto market has recovered significantly. From the perspective of supply and demand, the growth of the supply side slowed down, domestic and foreign demand continued to recover, and the situation of oversupply is gradually improving. Looking to the future, the molybdenum price in the first quarter after the rise, the market is gradually adjustment, the second quarter price may fall slightly, and with the further release of domestic demand, it is expected that the average price of domestic molybdenum concentrate is expected to maintain at 1600 yuan/ton.