Investment Rating - The industry investment rating is maintained at "Overweight" [2][41] Core Insights - The tungsten industry continues to show strong market performance, with a cumulative increase of 35.91% in February, significantly outperforming the benchmark (CSI 300) by 35.82 percentage points [5] - The valuation of the industry (TTM P/E ratio) has risen from 55.45x at the beginning of the month to 75.76x, currently at 97.52% of its historical percentile [5] - Domestic tungsten product prices have surged due to tight resource supply, with significant increases in both black and white tungsten concentrate prices [6][8] - The international tungsten prices have also risen, reflecting the upward trend in domestic prices [8] Monthly Performance Summary - In February, the domestic tungsten concentrate price for 65% black tungsten increased by 32.89% month-on-month to 684,500 CNY/ton, and by 375.35% year-on-year [8] - The price for 65% white tungsten rose by 32.92% month-on-month to 682,000 CNY/ton, with a year-on-year increase of 379.06% [8] - The ammonium paratungstate (88.5%) price increased by 32.63% month-on-month to 1,006,000 CNY/ton, with a year-on-year increase of 374.87% [8] - Tungsten powder prices also saw significant month-on-month increases, with prices for tungsten powder (≥99.7%, 2-10um) rising by 37.32% to 1,717.5 CNY/kg, and a year-on-year increase of 440.99% [8] Supply and Demand Dynamics - The tungsten supply chain is experiencing a seasonal decline in production, exacerbating supply tightness, with domestic tungsten concentrate production dropping by 39.46% month-on-month in February [9] - The operating rate for tungsten concentrate production fell to 35.31%, below the previous year's levels during the Spring Festival [9] - Inventory levels across the tungsten supply chain are at historical lows, with significant reductions in stock for tungsten concentrate, ammonium paratungstate, and tungsten powder [11] Profit Distribution and Market Outlook - The profit margins for tungsten concentrate are expanding due to resource scarcity and price increases, with simulated gross profit reaching 539,400 CNY/ton, a month-on-month growth of 50.71% [11] - The midstream sector is also seeing profit expansion, while the downstream sector faces pressure due to cost transmission issues [11] - Long-term, the tightening of tungsten supply due to various factors, including declining ore grades and stricter mining controls, is expected to support higher tungsten prices [11][38] - The report suggests that the first batch of tungsten mining control indicators for 2026 is expected to tighten, reinforcing the supply constraint logic [38]

Investment Rating - The industry rating is upgraded to "Overweight" from "Buy" due to rapid valuation increases and optimistic expectations reflected in stock prices [5]. Core Insights - The tungsten industry has shown strong market performance with a significant valuation increase, outperforming the benchmark index [2]. - Domestic tungsten prices have reached historical highs, driven by tight supply at the mining level and rising prices for long-term contracts [3]. - The supply chain remains constrained by tight raw material availability, leading to limited demand release and reduced transaction volumes [6]. Price Statistics - In January 2026, the average price of 65% black tungsten concentrate increased by 26.69% month-on-month to 510,600 CNY/ton, and by 254.75% year-on-year, with the increase from December 2025 expanding by 72.05 percentage points [5]. - The average price of 65% white tungsten concentrate rose by 26.76% month-on-month to 508,700 CNY/ton, with a year-on-year increase of 256.66% [5]. - The average price of ammonium paratungstate (APT) increased by 26.2% month-on-month to 751,400 CNY/ton, with a year-on-year increase of 254.53% [5]. Supply and Demand Dynamics - The supply of tungsten concentrate has slightly decreased, with weekly production dropping from 1,880 tons to 1,870 tons [6]. - The production of APT is estimated to increase by 5.88% in January 2026, but the overall supply remains constrained due to tight raw material availability [6]. - Demand is primarily driven by essential needs, with limited room for growth as rising raw material prices suppress downstream replenishment [6]. Profitability Analysis - Mining profits are expanding due to resource scarcity and price increases, with simulated gross profit for tungsten concentrate reaching 334,900 CNY/ton, a month-on-month increase of 40.77% [6]. - The midstream refining sector is also seeing steady profit growth, while downstream processing and alloy sectors are experiencing profit pressure due to lagging price transmission [6]. Investment Recommendations - The long-term outlook for the tungsten industry is positive, with supply constraints expected to strengthen due to declining ore grades and increased mining costs [6]. - Short-term expectations indicate that tight supply conditions will likely persist, supporting strong tungsten concentrate prices [6]. - Continued focus is recommended on companies with rich tungsten resources and integrated industrial layouts, particularly those investing in deep processing and emerging product areas [7].