Summary of Tungsten Industry Conference Call Industry Overview - The tungsten price has significantly increased since the beginning of the year, with tungsten carbide powder prices surpassing 555,000 yuan per ton and medium particle tungsten carbide powder reaching 625,000 yuan per ton. This surge has dampened the purchasing willingness of downstream alloy enterprises, increasing market uncertainty [1][2][3]. Key Factors Driving Tungsten Price Increase - The rise in tungsten prices is driven by three main factors: 1. **Policy Constraints**: The Ministry of Natural Resources has implemented strict mining quotas, reducing the first batch of mining quotas in 2025 by 6.45% to 58,000 tons, with significant cuts in major production areas like Jiangxi [3][4]. 2. **Resource Bottlenecks**: Domestic tungsten ore quality has declined from 0.42% to 0.28%, increasing mining difficulty and costs. Environmental standards have also tightened, limiting supply elasticity [4]. 3. **Demand Surge**: Emerging sectors such as photovoltaics, batteries, and high-end manufacturing are driving strong demand for tungsten [4][5]. Challenges Facing the Tungsten Hard Alloy Industry - The tungsten hard alloy industry is currently facing challenges including: - **Price Volatility**: Tungsten prices have shown strong upward trends, with prices for 65% grade tungsten concentrate rising from 141,500 yuan per ton to 281,500 yuan per ton since the beginning of 2025 [2]. - **Cost Pressures**: Rising costs are squeezing profit margins, with some tool products' gross margins dropping below 10% [6][7]. - **Increased Competition**: A price war has intensified, particularly affecting small and medium enterprises, which struggle to survive amid rising costs and declining demand [6][7][9]. Strategic Responses from Hard Alloy Enterprises - To cope with cost pressures, hard alloy enterprises should: - **Innovate Technologically**: Improve production efficiency and product value through technological advancements [5][12]. - **Strengthen Supply Chain Management**: Establish long-term relationships with suppliers to lock in raw material prices and mitigate market volatility [5][17]. - **Invest in Environmental Technologies**: Enhance environmental compliance and reduce costs through better waste management practices [5][13]. Future Trends in the Tungsten Hard Alloy Industry - The industry is expected to experience a dual-track development in pricing and technology. Global strategic reserves and export controls will maintain high tungsten resource prices, while demand from new energy and high-end manufacturing sectors will drive technological innovation [8][20]. Downstream Demand and Market Dynamics - Traditional manufacturing sectors are experiencing weak demand for tungsten hard alloys, with orders declining by 10% to 15%. However, emerging industries like aerospace and new energy are showing growth potential [11][22]. - The structure of downstream applications for hard alloys includes cutting tools (45%), wear-resistant tools (27%), and mining tools (25%) [23]. International Market and Future Demand - Overseas demand for tungsten is projected to grow, driven by global supply chain restructuring and increased military needs. The military sector's demand is expected to grow at a compound annual growth rate of 7% to 9% from 2025 to 2027 [24][30]. Conclusion - The tungsten hard alloy industry is navigating a complex landscape characterized by rising prices, increased competition, and evolving demand dynamics. Companies must adapt through innovation, strategic partnerships, and effective supply chain management to thrive in this challenging environment [1][8][20].

Core Viewpoint - The price of tungsten products has been continuously rising this year, driven by supply constraints and increasing demand from various industries, particularly in the renewable energy sector [1][3][4]. Price Trends - Tungsten concentrate prices have surged, with a recent increase of 3,000 to 10,000 yuan per ton. As of August 20, the price for 65% tungsten concentrate was 217,000 yuan per ton, up 51.75% since the beginning of the year [1]. - The price for ammonium paratungstate (APT) reached 311,500 yuan per ton, reflecting a 47.98% increase year-to-date, while tungsten powder prices rose to 482.5 yuan per kilogram, up 53.91% [1]. Supply and Demand Dynamics - Supply has tightened due to a reduction in mining quotas set by the Ministry of Natural Resources, with a 6.45% decrease in the first batch of tungsten mining quotas for 2025 compared to 2024 [3]. - Major tungsten-producing regions, such as Jiangxi and Yunnan, have also seen significant reductions in mining output, leading to a sharp decrease in market circulation [3]. - Demand for tungsten is growing, particularly in hard alloy applications across various sectors, including aerospace, defense, and electronics. The demand for tungsten in the renewable energy sector is expected to exceed 4,500 tons by 2025 [3]. Market Outlook - Short-term prospects for tungsten prices are positive, driven by restocking needs and export recovery. However, long-term supply constraints may lead to a sustained increase in tungsten prices [4]. - The profit distribution within the tungsten industry is characterized by a "smile curve," where companies at both ends of the value chain are likely to benefit from rising tungsten prices [4]. Stock Performance - Tungsten-related stocks in the A-share market have generally risen, with an average increase of 10.1% since August. Notable performers include Luoyang Molybdenum, Zhongtung High-tech, and Xianglu Tungsten, with cumulative increases of 22.48%, 18.99%, and 17.41%, respectively [5][9]. - Some tungsten stocks are currently undervalued, with a median rolling P/E ratio of 30.24 times, and companies like Shengtun Mining and Luoyang Molybdenum have P/E ratios below 20 times [6]. Company Performance - Shengtun Mining has the lowest valuation with a rolling P/E ratio of 12.41 times and holds 32,200 tons of tungsten metal in its own mines [7]. - Among the companies that have reported earnings, a significant proportion (75%) showed positive growth, with Luoyang Molybdenum expected to report a net profit of 8.2 to 9.1 billion yuan for the first half of the year, marking a year-on-year increase of 51.37% to 67.98% [7].

Market Overview - On June 11, the tungsten sector showed strength, with Xianglu Tungsten Industry hitting the limit up, and other companies like Xiamen Tungsten, Zhangyuan Tungsten, and China Tungsten High-tech also experiencing collective gains [1] Company Insights - Xianglu Tungsten Industry (002842.SZ) has turned profitable, operating in the complete tungsten industry chain, including mining, smelting, and production of various tungsten products, with a significant mining area of 5.96 square kilometers [2] - Guangdong Guangsheng Nonferrous Metals (600259.SS) has also turned profitable, focusing on a diversified industrial layout of rare earths, tungsten, and copper, with a tungsten resource reserve of 65,000 tons [2] - Xiamen Tungsten (600549.SS) is one of the largest tungsten smelting product processing companies globally, with a complete tungsten industry chain and significant market share in tungsten wire production [2] - Zhangyuan Tungsten (002378.SZ) is a leading tungsten smelting product processing company, with a complete production system from mining to deep processing and tungsten resource reserves of 94,600 tons [2] - Luoyang Copper (603993.SS) is a global leader in copper, cobalt, aluminum, and tungsten production, with a tungsten resource reserve of 26,040,000 tons [2] Price Trends - As of June 6, the price of 65% WO3 tungsten concentrate in China surpassed 173,000 yuan per ton, marking an increase of 31,000 yuan since the beginning of the year, with a cumulative rise of 21.8%, reaching a historical high [3] Institutional Analysis - China will implement export controls on tungsten-related matters by February 2025, which is expected to strengthen the strategic nature of tungsten resources, as 90% of tungsten concentrate processing capacity is concentrated in China [4] - The application of tungsten in various fields, including photovoltaic cutting and robotics, is expected to drive demand growth [5] - Supply constraints are anticipated due to declining production from existing mines and limited new mine launches, with the first batch of tungsten mining quotas for this year down 6.5% year-on-year, contributing to rising tungsten prices [5] - The tungsten market is expected to enter a bull market phase, with prices likely to continue breaking historical highs, and the supply-demand gap projected to expand from 18,300 tons in 2024 to 19,100 tons in 2028 [5]

Core Viewpoint - The company reported a decline in revenue and a net loss for the reporting period, primarily due to weakened demand and increased production costs in the tungsten market, particularly in the photovoltaic sector [1][2][7]. Company Overview - The company achieved operating revenue of 174.902 million yuan, a decrease of 2.77% year-on-year. The net profit attributable to shareholders was -8.95 million yuan, an increase of 30.68% compared to the previous year [1]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -12.05 million yuan, an increase of 7.56% year-on-year [1]. Business Performance - The average price of 65% black tungsten concentrate increased by approximately 14.07% year-on-year, reaching 137,000 yuan per ton, but the overall market demand did not show significant growth, leading to a decline in product gross margins [1]. - The company's production and sales of tungsten carbide powder decreased by 18.68% and 11.48%, respectively, while hard alloy production and sales increased by 15.83% and 31.93% due to national infrastructure projects [3]. Product Development - The company is focusing on the development of new products, particularly in the photovoltaic tungsten wire sector, which has led to increased R&D expenses [2]. - The company is advancing the construction of a project for ultra-fine tungsten wire, with a production capacity of 500 million meters per month, aiming for an annual output of 30 billion meters [6]. Strategic Adjustments - The company has strategically exited the precision tool business to concentrate resources on more promising areas for sustainable development and profitability [4]. - The company plans to enhance its organizational efficiency and reduce costs by integrating smart manufacturing and automation into its production processes [7]. Financial Data - The company reported non-recurring gains and losses of 31.0007 million yuan, primarily from government subsidies and non-current asset disposal gains [2]. - The company has not experienced significant changes in its operational situation during the reporting period [16].