29

2019

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05

The trade war launched by the United States after the bullish aluminum price pushed up the tungsten price

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If trade frictions escalate, China may carry out anti-sanctions against the United States in the field of tungsten resources. The deep processing of American tungsten industry is highly dependent on China's imports. After Trump imposed tariffs and imposed trade sanctions on Rusal, the price of LME aluminum rose to a new high in nearly seven years. Besides aluminum, who is the next metal that may rise? Zhao Dongchen, chief analyst of the raw materials industry of ICBC International, told the interface reporter that the development of Sino-US trade friction will have a key impact on the rise of tungsten. On April 23, the average price of domestic wolframite concentrate with a grade of more than 65% was 110500 yuan/ton, and the average price of APT (processed products of ammonium paratungstate and tungsten concentrate) was 170500 yuan/ton. From 2011 to 2016, the price of tungsten remained low, and the average price of more than 65% of domestic wolframite concentrate was 67000 yuan/ton in 2016. From July 2016, the price of tungsten concentrate and APT began to rise steadily. By September 2017, the price of tungsten rose by 50% year on year. The average price of domestic wolframite concentrate of more than 65% reached 120000 yuan/ton. Tungsten is listed as a strategic metal by China and a key commodity by the EU. It is mainly used in automobiles, integrated circuit triodes, aerospace development, communication technology, military industry, etc. Zhao Dongchen said that if trade frictions escalate, China may carry out anti-sanctions against the United States in the field of tungsten resources. "If China raises tariffs, lowers quotas or even stops exporting tungsten resources, it will lead to a sharp rise in the price of international tungsten products. For the United States, its domestic cemented carbide production will have a disruptive impact, which will have a serious negative impact on its downstream industry." China supplies 80% of the world's tungsten raw materials, mainly produced in Jiangxi, Hunan and Guangdong. China imposes total mining restrictions on tungsten. In 2017, the total tungsten production control index issued by the Ministry of Industry and Information Technology of the People's Republic of China was 91300 tons, the same as the previous year. Zhao Dongchen, a professional non-standard cemented carbide manufacturer of Jiangxi Zhonggang Industry, said that the U.S. tungsten industry is mainly located in the latter part of the tungsten processing industry chain, namely the deep processing link. Its tungsten resources are imported from intermediate products, which is highly dependent on China's imports. According to the data of the United States Geological Survey and the Bureau of Statistics, the import of tungsten raw ore and concentrate in the United States mainly comes from Bolivia, Spain and Portugal, and the proportion from China is less than 1%. However, the deep processing of American tungsten industry is highly dependent on China's imports. About 60% of APT imports come from China, and more than 80% of tungsten oxide imports come from the mainland of China and entrepot trade through Hong Kong. In addition, about 35% of tungsten powder imports come from China, about 55% of tungsten material imports come from China, and about 40% of tungsten carbide powder imports come from China. From the perspective of alternative resources, there are currently no tungsten projects under construction in the United States, and the space for other import source countries to expand production capacity is relatively limited. Zhao Dongchen analyzed that small and medium-sized enterprises such as Silver Predator in the United States have a number of planned projects, but none of them have yet started construction. Only small and medium-sized enterprises such as Northcliff Resources have project reserves in Canada and other countries abroad, and are also in the early stage. The possibility of production in the next three years is very low. Except for China, the vast majority of APT imports from the United States come from Germany, which has limited space to expand its capacity; In the import of tungsten powder and tungsten materials, the two major sources of import are South Korea and Japan, and the tungsten raw materials are mainly from China; Tungsten oxide has few alternative sources of import. China is carrying out environmental protection verification on resource enterprises including tungsten, and with the recovery of foreign demand, ICBC International is optimistic about the price trend of tungsten ore and its intermediate products in the processing industry chain in the next three years.

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