The tungsten industry is growing rapidly and the market demand is picking up steadily. Chongyi Zhangyuan Tungsten Co.Ltd(002378) ( Chongyi Zhangyuan Tungsten Co.Ltd(002378) . SZ) achieved double growth in operating revenue and net profit in 2021. The financial Associated Press reporter called the Securities Department of the company today and learned that the gross profit margin of the company has increased due to the simultaneous rise of the volume and price of the company’s products.
On March 11, Chongyi Zhangyuan Tungsten Co.Ltd(002378) released the annual performance express of 2021. The company achieved a revenue of 2.664 billion yuan, a year-on-year increase of 37.97%, a net profit of 164 million yuan, a year-on-year increase of 342.09%, and a net profit of 131 million yuan returned to the parent company after deduction, turning losses into profits year-on-year. For performance growth, the announcement said that the tungsten industry continued its rapid growth trend in 2021, the market demand rebounded steadily, and the production, sales and sales prices of main products increased year-on-year.
“All our prices were rising last year,” a person from the Securities Department of the company told the associated press of finance. At the same time, product sales and gross profit margin increased. According to the long-term quotation issued by the company, from the second half of December to the first half of January, the quotation of the company’s main product wolframite concentrate (WO3 ≥ 55%) increased by 21500 yuan / standard ton, the quotation of Scheelite Concentrate (WO3 ≥ 55%) increased by 21700 yuan / standard ton, and the quotation of ammonium paratungstate (national standard grade 0) increased by 35800 yuan / ton. At the same time, the price of cemented carbide products also increased by different ranges.
In 2022, the price increase continues. On March 7, the company issued a long single quotation in the first half of March. The quotation of wolframite concentrate (WO3 ≥ 55%) and Scheelite Concentrate (WO3 ≥ 55%) were 115000 / standard ton and 113500 / standard ton respectively, an increase of 7000 yuan / standard ton compared with the quotation in the second half of December last year; The quotation of ammonium paratungstate (national standard grade 0) was 178000 yuan / ton, an increase of 11000 yuan / ton. At the same time, the company sent two price adjustment letters again this year to adjust the price of its cemented carbide products.
However, it is noteworthy that compared with the second half of February, the quotation of long orders in early March has been reduced. In this regard, the person from the above company told the financial Associated Press: “the price of tungsten rose relatively fast some time ago this year, and the market also felt that this rate of rise was too fast. We quoted according to the market situation”. At the beginning of the year, affected by factors such as the Winter Olympics and the two sessions, the supply of mines was limited. In this regard, the person further said that many market factors in the early stage are not clear. With the end of the two sessions, the market will be slightly clearer and still have confidence in the market in the first half of the year.
In addition, the announcement said that with the increase in the demand for domestic high-end cutting tools, the income of Ganzhou aoketai Tool Technology Co., Ltd., a wholly-owned subsidiary, has increased in scale and significantly improved its performance. Public information shows that the company is mainly engaged in the R & D and sales of cemented carbide coated blades and other products. When the above-mentioned person told the financial associated press that compared with other products of the company, the price of Ganzhou aoketai products was relatively stable. “High end cemented carbide products are mainly high value-added products, and the price will be less affected by the market. The price increase is mainly based on medium and low-end products”.
At present, China’s cutting tool industry is in the process of import substitution. According to the data of the tool branch of China Machine Tool Industry Association, in 2020, the consumption scale of China’s tool market was 42.1 billion yuan, and the imported tools (including the production and sales of imported tools in China) was 13.1 billion yuan, a year-on-year decrease of 3.7%. In addition, from 2016 to 2020, the proportion of total import consumption decreased from 37.17% to 31.12%. According to the Research Report of Anxin securities, the downstream acceptance of domestic cutting tools will increase in 2021. With the release of production capacity of domestic head manufacturers such as Oke Precision Cutting Tools Co.Ltd(688308) ( Oke Precision Cutting Tools Co.Ltd(688308) . SH), Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ( Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) . SH), domestic substitution will continue to deepen in 2022.
