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Annual Summary of Tungsten Industry in 2012

  

 

    At the end of 2012, it is mixed delight and anxious for domestic tungsten industry. What delight us are that the policies of quotas for exportation, restriction on exploitation and industrial integration improve the developmental level of the whole industry. Breakthrough of various new technologies increases the industrial profitability. The new achievement in exploration enlarges the recoverable deposit. What fear us are deterioration of external environment and continuousness of European debt crisis. Exportation is hard to recover in short time.

Picture 1 Tungsten Bar Price Trend in Pan-Asia

Data source: Pan-Asia nonferrous metals exchange

    About the price performance, the price of this year fell compared with that of last year. It can be divided into three phases on tungsten bar market trends in Pan-Asia nonferrous metals exchange. Phase one: from listing to May, boosted by Warren Buffet’s investment in tungsten, the price raised to 490Yuan/kg from the lowest 400Yuan/kg with increase of 24%. Phase two: from the beginning of June to the end of August, restrained by European crisis and decline in domestic economy, the price fell from highest 490.8Yuan/kg to 350Yuan/kg, with decrease of -28%. Phase three: from the beginning of September till now, with the starting of investment in China and economic recovery, the price increased 19% from the lowest 350Yuan/kg to 418Yuan/kg.

 

    The price trends and running of real economy shows that tungsten industry is highly correlative with the economic situation. Under the circumstance of gradual starting investment, machinery and equipment industry is usually to be affected firstly. In machinery and equipment, tungsten is used in various machining. We think that it is related to characteristics of tungsten. In nonferrous metals, its melting point reaches 3410℃ so gains the name of “high temperature resistance champion”; Additionally, the tungsten is praised as “teeth of industry” because of its extreme high hardness. Tungsten and its alloy is widely used in iron and steel industry, equipment and manufacturing industry, information industry, electric power, petrochemical industry, aerospace and military industry. The specific applicationsare cutting inserts, mining alloys and wear parts, high-speed tool steel, alloyed tool steel and die steel.

    Seeing from the whole year, there was restriction exploitation and integration on tungsten, the demand and exportation was not active, so the status was oversupply which affected the price directly.

    Gaining new knowledge by reviewing the old, we summarized the events occurred in tungsten industry in 2012.

 

    1.Administration of the tungsten and tungsten products with export quotas license and state-run trade

    Ministry of Commerce and General Administration of Customs published Administration Measures of Export License Goods Catalog in 2012 and implemented on January 1st. The catalog control the export quotas license and state-run trade of tungsten and its products.

    The goods under export quotas license administration are: wheat, corn, rice, wheat meal, corn flour, cotton, converted timber, live cattle (to Hong Kong and Macaw), live pig (to Hong Kong and Macaw), live chicken (to Hong Kong and Macaw), coal, coke, crude oil, petroleum products, rare earth, antinomy and antinomy products, tungsten and tungsten products, zinc ores, tin and tin products, silver, indium and indium products, molybdenum and phosphate ore.

    Corn, rice, coal, crude oil, petroleum products, cotton, antinomy and antinomy products, tungsten and tungsten products, and silver are under the state-run trade administration.

 

    2.Buffettheavily invested in tungsten mines in South Korea led to stock price soaring for the related companies

    After March, 2011, Iscar Metalworking Co., Ltd. (IMC) in Israel,of which Buffett holds 80% share, announced that it purchased Tungaloy from Japan at USD 1 billion, and signed investment agreement of KRW 84 billion with Woulfe Mining run by South Korea SangdongMineon February 28thof this year. IMC is the second biggest WC tool producer, and Tungaloy is the fifth in the world. This investment can be regarded as overall investment in tungsten industry by Buffett.

 

    3.EU, America and Japan proposed trade negotiation on rare earth, tungsten and molybdenum

    On March 13th, America, European Union and Japan appealed to WTO DSB for China export restriction on rare earth and other raw materials. The three parties, America, European Union and Japan said that China’s export restriction on rare earth, tungsten and molybdenum violated the WTO rules and the protocol of China joining WTO, which include the export quotas, export license and export price limit measures. According to the relevant rules of WTO DSB, all the parties of dispute should negotiate within 60 days and try to eliminate dispute. If failed in negotiation, the party proposed the request could demand to set up experts group for investigation under WTO DSB.

 

    4. China Minmetals Corporation signed with Sandvikfrom Switzerland

    On April 24th, China Minmetals Corporation signed long-term supply agreement from 2013 to 2015 with Sandvik from Switzerland. President of China Minmetals Corporation, Zhou Zhongshu and president and CEO of Sandvik, Faxander signed on the agreement. The agreement validity is3 years, during which China Minmetals Corporation will supply to Sandvik 1,500 ton tungsten oxide productsworthing USD180 million.

 

    5.Three new material achievements including high purity nano-sized super-fine APT new technology and etc. in Jiangxi passed the appraisal

    Three technical achievements --high-performance IC semiconductor rods preparation technology, ultrasonic wave, microwave hydrothermal synergy strengthening technology for producing high purity nano-sized super-fine APT, and Tungsten carbide and titanium carbide solid solution powder production technology, developed by Ganxian Shirui New Material Co., Ltd. and Ganzhou Chiyuan New Material Co., Ltd., has passed the achievements appraisal organized by Jiangxi Province.

 

    6.The 25th annual meeting of International Tungsten Industry Association was held in Beijing

    The general goal during twelfth five-year of China tungsten industry development was published in the meeting. Control the total exploitation quantity and abandon the outdated smelting, in order to promoteindustry upgrading by technological innovation, enhance the technical equipment level comprehensively and accelerate the transformation of tungsten industry development. Firstly, we should improve the ability to guarantee resources. Focus on tungsten recycling to improve the comprehensive using of tungsten. Positively carry out the tungsten resource strategy to exploration, and enhance “the second exploration” around or deep in the mines. Secondly, we should strictly control the total quantity. Till the end of 2015, control the total exploitation of tungsten within 42 thousand tons (tungsten quantity), and export quantity of primary smelting products within 30 thousand tons (tungsten quantity). Thirdly, we should speed up the industry upgrade. Highlightthe development of various crystal shape and super-fine ammonium para-tungstate, super-fine nano-sizedand super-coarse tungsten powder and WC powder. Put emphasis on deep-processing of high precision, high  performance and high added value cemented carbide.

 

    7.Jiangxi protectively purchases and stores resources such as copper, tungsten and rare earth in October

    Jiangxi Province, as the tungsten industry leading province in China, proposed to protectively purchase and store strategic resources such as copper, tungsten and rare earth. Jiangxi is a province with great amount of nonferrous metals. There are 33 types of nonferrous metals that explored ranked top five reserves. Copper, tungsten, rare earth, tantalum-niobium and uranium are called “five golden flowers” of Jiangxi nonferrous metals.

 

    8.Nine ministries including Ministry of Work Safety published Opinions on Rectification of Metal and Nonmetal Mines

    In the Opinion, it wasdecidedthe mines need to be rectified during 2012-2015. The tasks in the Opinionare that till the end of 2015, on one hand the illegal actions of exploitation without license should be effectively prevented, and small mines not consistent with industrial policies or safety regulations should be closed, on the other hand the actions of wasting or destroying the mineral resources and polluting the environment shall be effectively stopped.