Institutions: Tungsten supply and demand fundamentals are experiencing a strong resonance

Huayuan Securities believes that existing high-priced inventory is being worked through, and tungsten prices have adjusted slightly. On the supply side, mine safety oversight and environmental protection controls are becoming stricter; during holidays and with increased inspection efforts in major producing areas, domestic tungsten mine operating rates have declined. On the demand side, in January to February the tungsten market saw a rapid rise; domestic downstream companies have a high level of enthusiasm for replenishing inventory, which has gradually led to an accumulation of industry raw material inventories. In the recent terminal market, the focus has been on digesting prior inventories, and there has not been any large-scale new inventory replenishment activity.

Guojin Securities believes that the recent pullback in tungsten prices is more due to traders taking profits, rather than a turning point in the fundamentals. Recently, Ganzhou City announced the launch of a special joint action to crack down on illegal mining-related resources and criminal activities; and against the backdrop of overseas intensifying strategic stockpiling, tungsten’s priority may be relatively high. The tungsten supply-and-demand fundamentals are set to experience strong resonance.