Summary of Tungsten Industry Research Industry Overview - The global tungsten resource reserves are approximately 4.6 million tons, with China accounting for about half, contributing 83% of the annual production of around 80,000 metal tons [1][4] - The domestic tungsten industry is highly concentrated, with major players like China Minmetals, China Tungsten and Hightech, Xiamen Tungsten, and Jiangxi Tungsten Group holding 60% of the national capacity [1][6] Key Points and Arguments - **Production Control**: China implements total control over tungsten mining, with a 6% decrease in the first half of 2025 compared to the previous year due to small mines not requiring quotas and underutilization of quotas [1][5] - **Cost Structure**: The complete cost for leading domestic companies ranges from 60,000 to 70,000 RMB per ton, while some companies have costs between 90,000 to 110,000 RMB per ton [1][8] - **Export and Import Dynamics**: China prohibits the export of raw tungsten but allows limited imports, with imports in the first half of 2025 reaching 7,306 tons, a 65% increase year-on-year [1][9] - **Demand Growth**: National tungsten consumption is expected to reach 70,000 metal tons in 2024, a 3.5% increase, with hard alloys accounting for 60% of this demand [1][10] Market Trends - **Hard Alloy Applications**: The hard alloy sector is projected to grow, with production nearing 60,000 tons in 2024, reflecting a 10% year-on-year increase [1][11] - **High-frequency Tracking Indicators**: Demand for hard alloys is tracked through macro indicators such as PMI index, machine tool production, and excavator output [1][12] - **Domestic Market Dynamics**: The domestic hard alloy tool market is expanding, with significant market share held by companies like China Tungsten and Xiamen Tungsten, although foreign companies still dominate revenue [1][13] Future Projections - **Supply-Demand Gap**: A projected supply-demand gap of 2,600 tons in global tungsten supply is expected to persist into 2026 due to delays in new project launches and a recovery in global manufacturing [1][16] - **Strategic Developments**: Xiamen Tungsten plans to increase tungsten concentrate production by 3,200 tons and is exploring new reserves, aiming for a total capacity of 22,000 tons by 2026 [1][18] Company-Specific Insights - **Xiamen Tungsten**: This leading company is expanding its tungsten mining capacity and downstream processing, with a focus on increasing tungsten wire penetration in the photovoltaic sector [1][3][14] - **Dongwu High-Tech**: The company is enhancing its tungsten mining operations and has plans to increase production capacity significantly by 2027 [1][19][20] Investment Considerations - **Stock Correlation**: The stock performance of tungsten industry companies is closely linked to tungsten concentrate prices and downstream demand, particularly in integrated companies like China Tungsten and Hightech [1][21]

Group 1: Company Overview - Xiamen Tungsten Co., Ltd. focuses on three core businesses: tungsten, molybdenum, and rare earth materials, continuously innovating in technology and management to enhance its industrial layout in tungsten, molybdenum, rare earth, and lithium battery materials [3][4][12] - The company has a complete tungsten industry chain, including mining, smelting, powder production, and deep processing, which provides a stable resource guarantee for downstream processing [4][10][15] Group 2: Financial Performance - For the first half of 2025, the company reported operating revenue of approximately 19.18 billion yuan, an increase of 11.75% compared to the same period in 2024 [3] - The total profit for the same period was approximately 1.69 billion yuan, a decrease of 10.29% year-on-year, while the net profit attributable to shareholders was approximately 972.20 million yuan, down 4.37% from the previous year [3] Group 3: Market Trends and Demand - The tungsten market has shown an upward trend, with the average price of 65% black tungsten concentrate reaching 150,000 yuan per ton, a 12.11% increase year-on-year [4][5] - Global tungsten consumption in the first half of 2025 was approximately 35,885 tons, reflecting a year-on-year growth of 2.1%, driven by demand in construction, machine tools, and automotive sectors [5][6] Group 4: Molybdenum Market Insights - Molybdenum prices have shown a fluctuating upward trend, with the average price of molybdenum concentrate at 3,543 yuan per ton, a 1.1% increase year-on-year [9] - The company holds a leading position in the domestic molybdenum market, with over 40% market share in ammonium molybdate and significant presence in molybdenum powder and wire products [10] Group 5: Rare Earth Market Dynamics - The rare earth market has experienced price increases, with the average price of praseodymium-neodymium oxide reaching 6.63 million yuan per ton, an 11.82% increase year-on-year [13] - The company has established a comprehensive rare earth industry chain, ensuring stable supply through strategic partnerships and focusing on high-value-added products [15][16]

Group 1 - Tungsten is a critical industrial metal, often referred to as the "tooth of industry," due to its exceptional hardness, high melting point, and significant density [1][3] - Tungsten alloys are widely used in military applications, including tank armor-piercing projectiles and missile warheads, as well as in aerospace components like rocket engine nozzles and turbine blades [3][5] - China holds over 50% of the world's proven tungsten reserves and accounts for 82% of global production, establishing a dominant position in the tungsten market [7][11] Group 2 - Chinese tungsten companies have shifted from exporting raw materials to producing high-value-added tungsten products, increasing their share in the global high-end market [9][11] - In 2023, tungsten was officially classified as a strategic mineral resource in China, leading to a 15% reduction in annual mining quotas to stabilize production at 140,000 tons [11][15] - The U.S. relies on imports for over 35% of its tungsten resources, with a 100% dependency on foreign sources for high-end tungsten products used in aerospace and military sectors [13][16] Group 3 - The U.S. has faced supply chain disruptions due to a shortage of high-end tungsten alloys, impacting production timelines for military equipment like the F-35 fighter jet and M1A2 tanks [16][18] - Major semiconductor companies, including Intel and TSMC, are experiencing tight supplies of precision tungsten wire, leading to a 40% price increase and production adjustments [18][20] - The U.S. government has initiated a "critical minerals strategy" with a budget of $3.5 billion for exploration and development of tungsten and other essential minerals [20][22] Group 4 - American companies are attempting to circumvent Chinese controls by sourcing tungsten through intermediaries in Vietnam and Mexico, but China's stringent regulatory framework complicates these efforts [24][25] - Data from Vietnamese customs indicates a 67% year-on-year decline in tungsten exports to the U.S. in the first half of 2024, highlighting the effectiveness of China's resource management policies [25][27] - China's strategic management of tungsten resources not only protects its limited resources but also ensures industrial security, presenting a sustainable model for global resource utilization [27]

Core Viewpoint - Xiamen Tungsten (600549.SH) is actively promoting the application of tungsten wire in robotic tendon-related fields, highlighting its excellent fatigue resistance and tensile strength, which are crucial for high-precision movements in surgical robots [1] Company Summary - The company has indicated that tungsten wire is utilized in the production of micro-mechanical cables for surgical robots, ensuring high precision without compromising strength [1] - Xiamen Tungsten is focusing on expanding the use of tungsten wire in the robotics sector, particularly in applications related to tendon strings [1]

Summary of the Conference Call for Gaoce Co., Ltd. Company Overview - **Company**: Gaoce Co., Ltd. - **Date**: June 26, 2026 Key Points Industry Performance - The photovoltaic (PV) equipment industry is currently undergoing a capacity clearing phase, with low operating rates and irrational pricing, leading to significant pressure on the industry [4][33]. - Gaoce's financial data indicates an improvement in Q2 compared to Q1, with expectations for continued growth in Q3 and Q4 [4]. Financial Performance - Gaoce's Q1 performance showed improvement, with expectations for Q3 and Q4 to continue this trend [2]. - The PV equipment business is expected to incur losses this year due to a significant reduction in new orders, with projected revenues down from last year [4][17]. - The company anticipates a loss in the PV equipment sector for 2025, with current orders valued at approximately 200-300 million yuan [17]. Business Segments - **Diamond Wire Business**: After three consecutive quarters of decline, the diamond wire business achieved breakeven in Q1 and continued to improve in Q2, with expected annual shipment volume significantly higher than last year [2][4]. - **Wafer Slicing Business**: Currently in a loss position, but the loss has narrowed significantly in Q2, with hopes for breakeven in Q3 and Q4 [2][25]. - **Innovative Business**: The company is expanding into semiconductor, silicon carbide, and sapphire stone sectors, with expected revenue growth surpassing last year's 244 million yuan [2][5]. R&D and New Products - Gaoce is developing a screw grinding machine for humanoid robots, leveraging technology from the PV and semiconductor sectors. This project is in the early stages, with a prototype expected by the end of the year [5][9]. - The company has introduced new materials, including ultra-high molecular weight, tungsten wire, and carbon wire, with nearly 10 clients currently testing these products [12][13]. Market Trends and Pricing - The market price for carbon wire is approximately 11 yuan per kilometer, while tungsten wire is around 22 yuan per kilometer [20]. - The penetration rate of FOS materials in the PV industry has reached nearly 70% as of May [21]. Challenges and Opportunities - The main challenge in developing the screw grinding machine is the internal thread grinding technology, which requires high precision in narrow spaces [8]. - There is a significant opportunity for domestic substitution of imported humanoid robot screw grinding machines, as current market offerings are primarily from overseas [7]. Future Outlook - The company expects stable growth in innovative business segments, particularly in semiconductor and silicon carbide, with increasing market demand anticipated in the coming years [27]. - The overall performance of the PV industry is expected to remain under pressure, with no significant changes anticipated in 2025 [33]. Strategic Initiatives - Gaoce is actively promoting convertible bond conversions and considering various measures such as performance management, strategic objectives, and share buybacks to facilitate this process [32]. Conclusion - Gaoce Co., Ltd. is navigating a challenging environment in the PV industry while strategically expanding into innovative sectors. The company is focused on R&D and product development to capitalize on emerging market opportunities, despite facing significant industry pressures.

Group 1 - The company, Guangdong Xianglu Tungsten Co., Ltd., plans to issue A-shares to specific investors, with a total fundraising amount not exceeding 490.8411 million RMB [18][21][12] - The issuance aims to support the production of ultra-fine tungsten alloy wire for photovoltaic applications, aligning with the rapid growth of the solar energy sector in China [10][11][12] - The company has established a complete production technology for ultra-fine tungsten wire, which meets the demands of the photovoltaic industry for cutting silicon wafers [33][29] Group 2 - The company is positioned within a competitive tungsten industry, which is supported by national policies promoting high-end tungsten products and the development of the photovoltaic sector [10][11][12] - The market for tungsten wire as a core material for cutting tools in the photovoltaic industry is expected to grow significantly, driven by the increasing demand for high-efficiency solar cells [11][12][33] - The company’s fundraising will enhance its capital structure, reduce financial risks, and support long-term strategic goals, thereby improving its core competitiveness and profitability [13][12][33]

Core Viewpoint - The tungsten industry is characterized by a significant supply-demand gap, with expectations of a global shortage increasing from 13,000 tons in 2023 to 18,000 tons by 2027, indicating a systemic rise in tungsten prices due to its strategic importance and scarcity [2][3]. Industry Overview - Tungsten is a globally important strategic resource known for its high hardness, melting point, and resistance to high temperatures and corrosion, making it essential in various sectors including transportation, mining, industrial manufacturing, and military applications [7][9]. - The global tungsten reserves are concentrated, with China holding over 50% of the total tungsten resources and production, making it a key player in the tungsten market [14][19]. Driving Factors - The rarity of tungsten resources and continuous innovation in mining technology are crucial for the industry's growth, with global tungsten reserves increasing from approximately 3.3 million tons in 2018 to 4.4 million tons in 2023, reflecting a compound annual growth rate of 5.9% [14]. - Demand for tungsten from downstream industries is on the rise, particularly in aerospace, military, and photovoltaic sectors, with projections indicating that global tungsten consumption could reach approximately 151,100 tons by 2028 [15]. - Technological advancements in mining and smelting processes are enhancing the efficiency and cost-effectiveness of tungsten extraction, making the market more attractive to investors [16][17]. Supply-Demand Structure - The supply of tungsten remains rigid, with China accounting for 52.5% of global tungsten reserves and 82.3% of production in 2024, despite a gradual decline in the quality of tungsten ore due to extensive mining [19][21]. - The Chinese government implements strict controls on tungsten mining, with total mining quotas gradually increasing but remaining limited, which contributes to a tight supply situation [21][27]. - The production cost of tungsten concentrates is expected to rise significantly, with estimates indicating costs could exceed 130,000 yuan per ton by 2024 [27][29]. Price Outlook - The price of tungsten is supported by strong cost factors, with production costs currently ranging from 96,000 to 107,000 yuan per ton, and expected to maintain upward pressure due to increasing mining costs and regulatory constraints [27][29]. - The global tungsten market is anticipated to experience price increases driven by supply constraints and rising demand from various industrial applications [2][3]. Industry Development Trends - The tungsten industry is expected to see continued growth in hard alloy production, with domestic production increasing from 33,800 tons in 2018 to an estimated 58,000 tons in 2024, reflecting a compound annual growth rate of 9.4% [37]. - The demand for tungsten wire, particularly in the photovoltaic sector, is projected to grow rapidly as it replaces traditional carbon steel wire due to its superior properties [53][54].

Investment Rating - The industry investment rating is "Strong Outperform" [1] Core Viewpoints - Tungsten is a significant strategic resource, widely used in various industries, and its price has risen to 161,000 yuan/ton, the highest since 2013, due to supply tightening and supportive policies [2][19] - The global tungsten resource distribution is concentrated, with China holding 55% of reserves and 83% of production, and no new mines expected to come online in the next two years [2][29] - Demand for tungsten is expected to improve significantly due to large-scale equipment updates and supportive policies, particularly in the machinery and aerospace sectors [2][54] - Export controls implemented by China in February 2025 have strengthened the strategic nature of tungsten resources, with a projected global supply-demand gap of 5,433 tons by 2027 [2][19] Supply Summary - Domestic supply is tightening, with the first batch of tungsten mining indicators for 2025 reduced by 4,000 tons compared to 2024, leading to a 6.45% decrease in total mining quotas [33] - China's tungsten production is expected to decline due to the lack of new mining projects and decreasing ore grades, with the first batch of mining indicators for 2025 set at 58,000 tons [33][29] - The industry is experiencing consolidation, with larger companies dominating production as smaller firms exit the market due to regulatory pressures [33][29] Demand Summary - The demand for tungsten is closely linked to industrial development and macroeconomic conditions, with hard alloys being the primary application, accounting for 58.51% of tungsten consumption in 2024 [50] - The demand for tungsten materials is expected to rise, particularly in the photovoltaic sector, where tungsten wire is gaining traction due to its superior performance [62][66] - A large-scale equipment update initiative is expected to boost demand for tungsten, with significant investments planned across various sectors [54][57]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the tungsten and rare earth elements industry, particularly regarding China's export controls and market dynamics [1][3]. Core Insights and Arguments - China has strengthened export controls on rare earth and tungsten minerals, using this as leverage in trade negotiations, particularly against U.S. demands to ease restrictions [1][3]. - China's production accounts for approximately 85% of global tungsten supply, with an expected export volume of about 15,000 tons in 2024 [1][3]. - The global leader in hard alloy, Kennametal (USA), is highly dependent on Chinese tungsten raw materials, indicating a significant reliance on China's supply chain [2][4]. - Tungsten has been added to the export control list, highlighting its strategic importance [5]. - The Ministry of Natural Resources has set the first batch of tungsten mining quotas for 2025 at 58,000 tons, a decrease of 4,000 tons year-on-year, marking a continuous decline in supply [6]. Additional Important Content - The difficulty of tungsten mining is emphasized, with strict national quotas limiting new mining operations, leading to insufficient supply growth [7]. - There has been a breakthrough in the use of tungsten wire in robotic tendon applications, which currently represents 5% of tungsten demand; while immediate supply elasticity is limited, there is potential for future growth in this area [7].

Summary of Tungsten Industry Conference Call Industry Overview - The tungsten market is expected to remain tight in 2025, with no significant increase in supply and stable demand, leading to an optimistic outlook. The average price for the year may reach around 160,000 yuan, with a fluctuation range of 20%-30% [1][7] - In Q1 2025, tungsten exports significantly decreased due to policy adjustments, with a cumulative decline of 27% by March. However, imports increased by 20% year-on-year, with tungsten concentrate imports growing by over 40% [1][3] Key Points on Demand and Supply - The demand for tungsten is expected to increase significantly due to nuclear fusion test reactors, with an estimated demand of over 3,000 tons of metal, accounting for about 5% of total consumption. The acceleration of domestic and international experimental reactor construction and commercialization is driving this demand [1][6] - The first batch of tungsten quotas for 2025 has been reduced by 4,000 tons, marking the largest reduction in five years. The strengthening of the Mineral Resources Law may lead to more policies managing strategic metals, presenting development opportunities for tungsten [1][9] - The Bakuta tungsten mine in Kazakhstan is expected to release 2,500-3,000 tons of metal in 2025, but the growth in domestic demand in China may offset this increase, resulting in limited impact on global supply and demand [1][10] Production and Inventory Insights - In Q1 2025, the tungsten industry maintained stable operations, with tungsten concentrate production increasing by less than 1% year-on-year. The hard alloy segment saw a 9.9% increase, indicating a shift in the industry chain focus [2][4] - Current tungsten industry inventory levels are low, with deep processing product increases outpacing raw material growth. Prices are higher than the same period last year, and it is expected that inventory will not see significant increases this year [4][17] Price Trends and Influencing Factors - Tungsten prices increased by 15% year-on-year in Q1, primarily due to the ongoing tight supply-demand situation established in 2023 and 2024. Despite insufficient order saturation, production is still growing, albeit at a slow pace [5][27] - The price increase in 2024 was influenced by geopolitical factors such as conflicts in the Middle East and Ukraine, while the price increase in 2025 is expected to be driven by domestic demand and regulatory policies [8][9] Export and Import Dynamics - The export of tungsten is approximately 30,000 tons annually, with domestic consumption around 64,000 tons. Exports account for about one-third of total demand, while domestic consumption makes up two-thirds [23] - Hard alloy products, including tools, are not subject to export restrictions, while raw materials require licensing. In 2024, hard alloys accounted for 32% of total exports, with raw materials exceeding 50% [16][25] Future Outlook - The global tungsten production in 2025 is expected to remain flat compared to last year, with limited growth in domestic production offsetting the increase from the Bakuta mine. Demand growth in tungsten materials, chemicals, alloys, and hard alloys is anticipated [32] - There is uncertainty regarding strategic reserve actions for tungsten in 2025, with potential interventions in the market depending on price levels and military supply needs [30][31]