CHINA TUNGSTEN MARKET UPDATE

Transcription

1 CHINA TUNGSTEN MARKET UPDATE ITIA 29th AGM, Stockholm, Sweden 27 Sep.2016 Shi Yusheng

2 20 years old Public listed private company 3500 Employees Committed to technology research & environmental protection Complete tungsten production chain: From mining & mine exploration, to powder metallurgy, & downstream manufacturing of cemented carbide products.

3 Main Points Since 2014, the declining demand in the international market and the slowdown in China s demand have led to an in-depth adjustment in the market price of tungsten. Since late March of 2015, there has been a panic in the tungsten market. The market price has dropped, causing tungsten enterprises struggle for survival. There is, however some promise of recovery. 1. Resources Situation 2. Market Supply and Demand 3. Market Situation

4 1.The current situation of tungsten in China

5 1. Resources Situation 1/9 Global tungsten reserves are 3.3 million metal tons China s reserves stands at 1.9 million 60% of the world s reserves. Austria, 1, 0% Other countries, 67, 20% Spain, 3.2, 1% Portugal, 0.42, 0% 1.1 Reserves Britain, 5.1, 2 % Vietnam, 10, 3% Russia, 25, 8 % Canada, 29, 9 % China, 190, 5 7% Global Tungsten Reserves Regional Distribution (10 thousand tungsten metal tons)

6 1. Resources Situation 2/9 Reserves are distributed among 23 provinces in mainland. Verified reserves in Jiangxi and Hunan account for 55% China's Tungsten Reserves Distribution (2014) 1.1 Reserves Fujian 4% Anhui 6% Other Provinces 15% Hunan 29% Guangxi 5% Guangdong 4% Gansu 6% Jiangxi 26% Henan 4%

7 1. Resources Situation 3/9 Features of scheelite in China: large quantities of associated minerals, lean ore and refractory minerals low integrated utilization rate Geological grade of over 80% < 0.4% Recovery rate of most scheelite <70%, Lower than that of Wolframite ore by 15-20%. Scheelite and Woflramite Mixture Ore 10% 1.1 Reserves Woflramite 33% Scheelite 57% Resource types of Tungsten of China in 2014

8 1. Resources Situation 4/9 1.2 Potential 3 Million tons (W0 3 ) in 2012

9 1. Resources Situation 5/9 China provides over 80% of the global tungsten consumption but has < 50% of tungsten reserves in the world. Global Tungsten Production Distribution Regions 1.3 Exploitation situation

10 1. Resources Situation 6/9 Global Tungsten Concentrate Production during (metal ton) Countries and Regions China Canada Russia Bolivia Rwanda Exploitation situation Portugal Austria Peru Other countries Global China s proportion% p.s.:1,source: World Bureau of Metal Statistics ;2,Production of China has been modified according to the statistics of The Yearbook of Nonferrous Metals Industry of China

11 Production, Metal(ton) 1. Resources Situation 7/9 Compared with foreign countries, the amount of tungsten ore mining in China is rising, while foreign tungsten production is declining. Comparison between China and Foreign Tungsten Production Exploitation situation Years Foreign Tungsten Production China Tungsten Production

12 production(tonwo365%) Scheelite % 1. Resources Situation 8/9 Crisis: The exploitable amount of wolframite in 2014 fell by 56% compared with that in Exploitation Production Variation of Wolframite and Scheelite in China during (Enterprises included in CTIA) situation Years Wolframite Scheelite Proportion of Scheelite%

13 1. Resources Situation 9/9 Costs & difficulties of selecting tungsten concentrate is increasing Main Technical-Economic Index of mineral separation of China ( ) Years Processing Raw-Ore Grade(%) Concentration Grade (%) Ore dressing recovery percentage(%) Exploitation situation

14 2. Domestic Supply & Demand

15 2. Domestic Supply and Demand 1/17 Government quotas promote the stability of exploitation, rational development, and protection of the ecological environment. Controlled Index of Tungsten Exploitation during (ton, WO 3 65%) Years Gross Amount Exploitation Integrated Use Reservation Policy of Tungsten Industry in China

16 2. Market Supply and Demand 3/17 Since 2015, China has canceled the export quota of tungsten. But. Export enterprises only increased from 13 in 2015 to 14 in List of State-Run Export Trading Enterprises with Tungsten Product (2016) Number Name of Enterprises 1 China Minmetals Non-Ferrous Metals Co.,Ltd 2 Sichuan Metals&Minerals Import&Export Corp. 3 Zigong Cemented Carbide Corp.,Ltd Management Tungsten Export Trade 4 SINOCHEM Group 5 Hunan ZhongNan Antimony&Tungsten Trading Co.,Ltd 6 Zhuzhou Cemented Carbide Works Imp.&Exp.Co. 7 Fujian JinXin Tungsten Co.,Ltd 8 Xiamen Tungsten Co.,Ltd 9 Xiamen Golden Egret Special Alloy Co.,Ltd 10 Guangdong XiangLu Tungsten Co.,Ltd 11 Jiangxi Rare Earth and Rare Metals Tungsten Group Corp. 12 Chongyi Zhangyuan Tungsten Co.,Ltd 13 Nanchang Cemented Carbide Limited Liability 14 Jiangxi Tungsten Industry Group Co.,Ltd

17 2. Market Supply and Demand 4/17 The export tax burden of enterprises has been lessened because the export tax has been cancelled, but the corporate tax has increased for tungsten ore mining Taxation Policy OLD NEW 7-9 Yuan per ton > 6.5% of the sales revenue Surging Production Costs From August 1 st,2016, APT smelting slags will be classified as hazardous wastes & will be put into supervision

18 2. Market Supply and Demand 5/17 Production of concentrate (2015) 129,090 tons Year-on-year growth of 1.79%. Stable over the last 5 years Tungsten Concentrate Production during in China (ton) Nationwide Inner Mongolia Zhejiang Market Supply of Tungsten Anhui Fujian Jiangxi Henan Hubei Hunan Guangdong Guangxi Yunnan Gansu Sinkiang Heilongjiang

19 metal ton 2. Market Supply and Demand 7/17 The amount of imported tungsten products in China (cemented carbide excluded) are in overall downtrend since Imported Tungsten Products in China from 1985 to 2015(cemented carbide excluded) Imported Tungsten Products Years Tungsten Concentrate Total Amount

20 2. Market Supply and Demand 6/ Imported Tungsten Products 2015: tons Total tungsten products % tons Tungsten concentrate % 2016 (Q1-Q2): tons Imported tungsten products % tons Tungsten concentrate % Imported Tungsten Products during (tons) Import volume Import value(10 thousand dollars) Average price(dollars/ton) included tungsten powder and materials proportion of gross imports(%)

21 2. Market Supply and Demand 8/17 Global Regional Distribution of Imported Tungsten Products in 2015 Import(ton) Proportion(%) Asia Africa Europe South America North America Australia Total

22 2. Market Supply and Demand 9/17 Regional Distribution of Imported Tungsten Concentrates in 2015 Import(ton) Proportion(%) Mongolia The Russian Federation Rwanda Burma Brazil North Korea Bolivia Canada Vietnam Total above Other countries Total

23 2. Market Supply and Demand 10/17 Recycled scrap tungsten: 10,000 tons (12% of the gross supply amount) No complete and stable network for recycling scrap tungsten Recycling of Scrap Tungsten Technology is still in the primary stage Quality of the recycled materials is poor + + Cannot be used to produce high-level cemented carbide Value of reclaimed resources is low

24 2. Market Supply and Demand 11/ Recycling of Scrap Tungsten Total output including recycling in ,150 tons

25 ton(metal) 2. Market Supply and Demand 12/17 The export market for tungsten products in China is still stagnant. The gross export of cemented carbide is increasing. Exported Tungsten Products during Exported Tungsten Products Years Export Cemented Carbide

26 2. Market Supply and Demand 13/ Exports: 19,905 tons total tungsten products -3.96% (cemented carbide excluded) 13,218 tons from quota -5.43% 6,235 tons cemented carbide, -9% 2016 (Q1-Q2) Exports: 10, tons tungsten products +7.52% tons from quota % Exported Tungsten products during ton,100 million dollars Export quantity Include:tungsten smelt products of middle and primary grades( with original quota) Ferrotungsten Tungsten materials Tungsten Filament Unsintered Metal Carbide Cemented Carbide Export quantity(cemented Carbide excluded) Export Value(Cemented Carbide excluded) P.s.:Source by statistics given by the Bureau of Customs, Amount of Cemented carbide estimated by CTIA.

27 2. Market Supply and Demand 14/17 Regional Distribution of Exported Tungsten Products in 2015 (Cemented Carbide Excluded) Export Volume (ton) Proportion(%) Japan Exported Tungsten Products South Korea Other countries in Asia Total of Asia Korea 22.98% USA 34.91% Europe The U.S.A Other Countries Total

28 Consumption(ton metal) 2. Market Supply and Demand 15/17 Since 1999, China has become with the largest consumer of tungsten in the world. Consumption: 14,600 tons in ,500 tons in 2015, %, Average rate of 7.77%. Global Consumption of Tungsten between 2005 to Apparent Consumption China Others America Japan Europe Years

29 2. Market Supply and Demand 16/17 As the pace of economic development slows, demand will decelerate 11th five-year plan ( ): Annual increase +6.30% 12th five-year plan ( ): Annual increase +5.89% Tungsten Consumption of China between 1995 and Apparent Consumption

30 2. Market Supply and Demand 17/17 A) Total Exported + Domestic Consumption 66,580 tons. B) Recycled tungsten: 10,000 tons, C) The market demand surpassed the supply by 14,570 tons (within normal range) Supply and Demand of Tungsten in China (Metal tons) Name of Index Supply Production of Tungsten Concentrate Market Supply of Tungsten Demand (Cemented Carbide excluded) Exported Tungsten Products (Cemented carbide excluded) Exported cemented carbide Apparent consumption Balanced value

31 3. Market Situation of Tungsten

32 3. Market Situation 1/8 In 2015, domestic demand slowed. Enterprises are faced with the double pressures of decreased prices and the increased cost. Monthly Average Price of Tungsten Concentrate during Jan to June Market Price

33 yuan/ton(wo365%) 3. Market Situation 2/8 Required Reforms: 1) Addressing Overcapacity 2) Reducing Inventory 3) Deleverage 4) Lower Costs 5) Bolster Areas of Weakness The advantage of cost has been reduced, which caused a serious deficit. Monthly average price of tungsten concentrate from Jan 2013 to June Market Price 年 2014 年 Months 2015 年 2016 年

34 10 thousand yuan/ton 3. Market Situation 3/8 25. Average Price of Domestic APT during Jan 2013 to June Market Price Months 2013 年 2014 年 2015 年 2016 年

35 dollar/dltu 3. Market Situation 4/8 Tendency of the monthly average price of Export APT During Jan to June Market Price Average Quotation of APT during Jan to June by London Metal Bulletin Months 年 2014 年 2015 年 2016 年

36 3. Market Situation 5/8 ( ) 408,900 tons % the fastest-growing period ( ) 447,100 tons slowed to +3.33% ( ) 621,900 tons stable at +1.87% Production of Tungsten Concentrate during in China Supply Situation

37 Metal ton 3. Market Situation 6/8 Demand will not recover immediately. Export of Tungsten Products from Jan to June (Cemented Carbide excluded) Supply Situation Month

38 Metal Ton 3. Market Situation 6/8 Export of Tungsten Products Jan to June Supply Situation 月份 2014 年 2015 年 2016 年

39 3. Market Situation 7/8 China will be implementing several large scale economic development projects which should spur demand in the the tungsten market 3.2 Supply Situation By 2020 the consumption of tungsten will be up to 55 thousand tons Annual rate of increase recovering to 6%.

40 3. Market Situation 8/8 The Ministry of Land and Resource of China (Nov.2015) The Notice of Standardize Approval and Examination Rare Earth Ore and Tungsten Ore Exploration and Mining Rights The Thirteenth Five-year-Plan Development Plan for the Land and Resources The Ministry of Industry and Information of China (Jan. 2016) 3.3 The Latest Policies Tungsten Industry Standard Conditions The Ministry of Environmental Protection of China (Aug.2016) National Hazardous Waste List General Office of China (June. 2016) The guideline of created good market situation to promote non-ferrous Metals Industry restructuring, transformation and increasing benefits

41 Thank you!