2025-06-09 15:30Summary of Tungsten Industry Conference Call Industry Overview - Tungsten Demand: Global tungsten demand is robust, with hard alloys being the primary consumption area, accounting for 65% of total demand. Emerging industries such as electric vehicles, aerospace, and military applications are driving growth in tungsten demand [2][3][4]. - China's Tungsten Resources: China holds 51% of global tungsten reserves and produces 80% of the world's tungsten. The industry is highly concentrated, with Jiangxi, Hunan, and Henan provinces holding 80% of China's reserves, which is 40% of global reserves [2][5]. - Price Dynamics: Tungsten prices have risen due to multiple factors, including environmental regulations, export controls, and structural constraints. In 2025, tungsten prices reached their highest level since 2011, with a cumulative increase of 21.8% [2][9]. Key Insights - Strategic Importance: Tungsten is considered a strategic resource, essential for industrial manufacturing, often referred to as the "industrial tooth." The supply-demand dynamics are tightening, leading to higher prices in the context of de-globalization [3][6]. - Supply Constraints: The growth rate of tungsten supply is limited, with China's production growth slowing down and overseas increments being insufficient to offset the reduction in Chinese output. By 2025, overseas supply is expected to increase slightly, but long-term production levels may stabilize around 2013 levels [4][15]. - Export Control Impact: China's tightening of supply indicators and export controls has led to a split in domestic and international price systems. Despite overall declines in tungsten product exports, the export of high-value downstream products like tools and blades has continued to grow [8][22]. Market Changes - Global Supply Chain Reconfiguration: Countries are increasingly focusing on the security of the tungsten supply chain. The U.S. and Europe are restructuring their supply chains and supporting overseas tungsten mining projects while planning to build higher strategic inventories [2][10]. - Investment Recommendations: Investors are encouraged to understand the fundamentals of tungsten and consider stock allocations in related companies, as the current price increases and favorable market conditions may lead to significant benefits for listed companies [7][28]. Financial Performance - Listed Companies' Growth: Major Chinese tungsten companies have shown significant revenue growth from 18.75 billion yuan in 2019 to 37.25 billion yuan in 2024, with a compound annual growth rate (CAGR) of 14.7% [25]. - Cash Flow Analysis: Leading companies reported stable operating cash flows, with significant improvements in financing activities, indicating a strong financial position to capitalize on market opportunities [26]. Future Outlook - Demand Projections: The demand for tungsten is expected to grow due to the rise of new industries and increased military spending globally. The compound annual growth rate for tungsten consumption is projected to be 2.61% from 2025 to 2038 [19][24]. - Price Trends: Tungsten prices are anticipated to remain high in the short term, driven by tightening supply and increasing demand for high-end equipment. The market is expected to enter a prolonged bullish phase [29]. Conclusion - The tungsten industry is poised for significant growth driven by strategic demand from various sectors, supply constraints, and favorable pricing dynamics. Companies in this sector are well-positioned to benefit from these trends, making tungsten a critical area for investment consideration.