Jianghai Securities·2026-01-20 09:27Investment Rating - The industry investment rating is upgraded to "Overweight" [1] Core Insights - The tungsten powder price has surged to a historical high of 1.2 million yuan per ton, reflecting extreme supply-demand tension and strong market expectations for long-term shortages [3][4] - The demand for tungsten is experiencing a significant expansion, particularly driven by the photovoltaic and new energy vehicle sectors, which are expected to create a structural demand explosion [5][6] - The supply side is tightening, with China's high-grade tungsten ore reserves expected to dwindle to 300,000 tons by 2025, leading to increased mining costs and a prolonged price increase cycle [6] - The industry chain is seeing profits concentrate upstream, with leading companies like Xiamen Tungsten and China Tungsten High-Tech benefiting from resource and technology advantages [7] Summary by Sections Industry Performance - Over the past 12 months, the industry has shown strong relative performance with a 1-month return of 18.45%, a 3-month return of 24.21%, and a 12-month return of 82.53% compared to the CSI 300 index [2] Demand Drivers - The photovoltaic sector is witnessing a rapid adoption of tungsten wire, with a market penetration rate exceeding 60% in silicon wafer cutting by 2025, significantly increasing tungsten consumption [5] - The new energy vehicle sector is also contributing to demand, with an expected increase of approximately 10,500 tons of tungsten due to the rising use of tungsten-containing alloys in electric motors and high-precision tools in battery manufacturing [5] Supply Constraints - Global tungsten supply is under pressure, with significant reductions in China's high-grade ore and limited contributions from overseas sources, leading to a potential crisis in tungsten availability [6] Industry Structure - The profit distribution within the tungsten industry is shifting towards upstream players, with companies holding quality tungsten resources poised to capture the benefits of rising prices [7]