As the world's largest tungsten resource reserves and producer, China has a dominant position in the supply side of tungsten ore. In recent years, affected by the total mining control index constraints, mine grade decline, environmental regulatory requirements to improve factors, China's tungsten concentrate production has slipped from 145,000 tonnes in 2019 to 123,000 tonnes in 2023. CITIC Securities believes that due to fewer new projects at home and abroad and the short-term increment is very limited, tungsten resource supply may continue to be tight, coupled with the recovery of downstream manufacturing sector brought about by the rebound in demand, the supply shortage will form a firm support for tungsten prices, tungsten prices may rise strongly to 18-20 million yuan / tonne.
Tungsten is a rare small metal, with high melting point, high density, high hardness, high wear resistance and other excellent physical and chemical properties. According to the U.S. Geological Survey (USGS), as of the end of 2023, the total global tungsten resources reserves of 4.4 million tonnes, of which 2.3 million tonnes of China's reserves, accounting for 52% of the world's global tungsten reserves CR3 of 74%, tungsten resources are highly concentrated in geographical distribution. According to the Ministry of Natural Resources statistics, Jiangxi and Hunan are the richest tungsten resources in China, as of the end of 2022 the two provinces accounted for 56%/20% of the country's total reserves, the distribution of ZhuXi tungsten mine, Dahutang tungsten mine, KakizhuYuan polymetallic mines and other tungsten mines.
According to USGS, despite the year-on-year increase in discovered tungsten resource reserves, the global tungsten ore production slumped from 8.5 million metal tonnes in 2019 to 7.8 million metal tonnes in 2023, mainly affected by China's total volume control policy and the decline in tungsten ore grade. According to the China Tungsten Industry Association, China's tungsten concentrate production in 2023 was 123,000 tonnes (63,400 tonnes of metal equivalent), a year-on-year decline of 3.4%.In 2002, China formally implemented the total volume control of tungsten mining.On 19 March 2024, the Ministry of Natural Resources announced that the first batch of the total volume control index for tungsten mining in 2024 would be 62,000 tonnes, which is a year-on-year decrease of 1,000 tonnes, as compared to the 2023 announcement of the The first batch of indicators decreased by 1,000 tonnes, a year-on-year decline of 1.6%, which is the first decline since 2020. It is expected that China's tungsten ore supply may continue to tighten in the future.
ralph lauren tungsten concentrate is China's main tungsten imports, recycled tungsten has become an important supplementary source of supply.
According to the statistics of the General Administration of Customs, the total import volume of tungsten products (excluding tungsten halogen lamps) in China has risen from 4,957.9 tonnes in 2019 to 9,369.4 tonnes in 2023, an increase of 89.0%; the corresponding import amount has increased from 634 million yuan to 1,451 million yuan, an increase of 128.7%. Structurally, tungsten concentrate accounts for 62% of the import quantity in 2023, and is the main category of tungsten products imported in China. Recycled tungsten refers to the recycling of solid waste residues in the tungsten production process as well as the waste of end consumer products, which has advantages such as good economic effect. According to the International Tungsten Industry Association, in recent years, the global utilization rate of recycled tungsten has gradually increased to 30-35%, and the utilization rate of recycled tungsten in developed countries such as Europe and the United States is more than 40%.
The future supply of new domestic tungsten resources mainly comes from Yaumapo tungsten and molybdenum mine and Kakizhuyuan tungsten mine technical improvement project, overseas from Boguty tungsten mine in Kazakhstan and Dolphin tungsten mine in Australia, of which the Boguty tungsten mine has been commenced construction in 2021, and will become the largest in-production single tungsten mine in the world after the completion of the project, the developer Jiaxin International is expected to be put into operation on a trial basis in 2024Q3 and start commercial production in 2025Q1. and start commercial production in 2025Q1. Overall, the global tungsten mine new projects are limited, considering that most of the projects are in the undeveloped or feasibility study stage, CITIC Securities believes that in the short term, it may be difficult to have a large amount of tungsten resources incremental input into the market on the mining side, and expects that the global supply of tungsten concentrates will be 87,500 tonnes of metal in 2028.
In recent years, by the mining total control index constraints, mine grade decline, environmental regulatory requirements to improve the impact of other factors, China's tungsten concentrate production has slipped from 145,000 tonnes in 2019 to 123,000 tonnes in 2023. CITIC Securities believes that due to fewer new projects at home and abroad and the short-term increment is very limited, tungsten resource supply may continue to be tight, coupled with the recovery of downstream manufacturing sector brought about by the rebound in demand, the supply shortage will form a firm support for tungsten prices, tungsten prices may rise strongly to 18-20 million yuan / tonne.
