Affected by the rising tungsten price, Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ( Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) . SH), Chongyi Zhangyuan Tungsten Co.Ltd(002378) ( Chongyi Zhangyuan Tungsten Co.Ltd(002378) . SZ), Zhuzhou hardware group and other companies have announced to raise the price of some cemented carbide products since April, which is another collective price increase of cemented carbide products since the middle of January this year.
Baichuan Yingfu tungsten industry analyst told the financial associated press that the supply of mines in the early stage was limited, and the logistics was limited under the repeated epidemic, resulting in high tungsten prices. With the general increase of cemented carbide prices, it may also boost upstream confidence. From the downstream, with the rise of raw materials in the upstream and the large demand for domestic substitutes, listed companies have made efforts to CNC tools.
Cemented carbide prices rise again
After mid January, many cemented carbide manufacturers recently sent price adjustment letters China Tungsten And Hightech Materials Co.Ltd(000657) ( China Tungsten And Hightech Materials Co.Ltd(000657) . SZ) a person from the Securities Department confirmed to the financial associated press that its Zhuzhou hardware group and Zigong Cemented Carbide Company have issued a price adjustment letter and issued a price adjustment notice through the official wechat of Zhuzhou hardware group.
Zhuzhou hardware official wechat announced that the prices of several products of Zhuzhou hardware group will be officially increased in early April, and the prices of geological and mineral alloy products of Zigong Cemented Carbide Company will also be adjusted from April 1. In addition, the prices of some blade products of Chengdu Great Wall cutting tools Co., Ltd. have been adjusted from March 26.
Chongyi Zhangyuan Tungsten Co.Ltd(002378) also announced through official wechat that the price of cemented carbide products will be adjusted from April 2 Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) Securities Department told the financial associated press that the company has recently issued a letter of product price increase Oke Precision Cutting Tools Co.Ltd(688308) ( Oke Precision Cutting Tools Co.Ltd(688308) . SH) a person from the sales department told the financial associated press that the price adjustment has not been announced yet, but the price increase may be "our policy has not come out, we are not sure yet, and it may rise".
For this price increase of cemented carbide, most companies said in the price adjustment letter that it was mainly affected by the rise in the price of raw material tungsten.
China Tungsten online statistics show that since the beginning of the year, tungsten ore and tungsten powder have increased to varying degrees. Wolframite concentrate and Scheelite Concentrate have increased by 7000 yuan / ton, ammonium paratungstate has increased by 11000 yuan / ton, and tungsten carbide powder has increased by 18 yuan / kg. At the same time, upstream cargo holders still cover the goods and support the market.
As the main material of cemented carbide products, tungsten price accounts for a large proportion in the downstream cost Oke Precision Cutting Tools Co.Ltd(688308) 2021 annual report shows that direct materials account for about 80% of the cost of cemented carbide products, while tungsten carbide accounts for 86% of raw materials.
Downstream demand is large, and some mining enterprises can not escape the impact of tungsten price Chongyi Zhangyuan Tungsten Co.Ltd(002378) Securities Department told the financial Associated Press, "because tungsten is a scarce resource, the state has control over the mining of tungsten ore. although our company has its own mine, its mining can not meet the demand of back-end production, so we still have to purchase externally".
The above analysts told the financial associated press that in addition to the limited minerals, the spread of the epidemic has led to the obstruction of logistics and the tightening of spot circulation in the market, which is also one of the reasons for the rise of tungsten price. "Some manufacturers said they could receive the goods two to three days ago, but now it's basically half a month.". From the perspective of downstream acceptance, it indicates that the acceptance of manufacturers is general in late March, but the demand turns better at the end of the month. With the price increase of cemented carbide and the improvement of downstream acceptance, there may still be a small upward space in the future.
At the same time, the price rise is also the layout of high-end expansion
In addition to price increases, many companies are also adjusting product structure, expanding high-end production capacity and enriching related categories.
China Tungsten And Hightech Materials Co.Ltd(000657) in the institutional research and relevant announcements, it is said that the production capacity of CNC blades of Zhuzhou drilling company has exceeded 100 million in 2021, and the production capacity of 10 million pieces of Zigong Cemented Carbide Company has also been put into operation. This year, another 10 million pieces of CNC blades and 2 million overall tool technical transformation projects will be expanded.
Oke Precision Cutting Tools Co.Ltd(688308) publicly disclosed information shows that by the end of 2021, the annual production capacity of the company's CNC blades is about 70 million, and the 40 million high-end CNC blades raised and invested by IPO will be gradually put into operation in the first half of this year. In 2021, nearly 2000 kinds of NC blade products were added, and the proportion of NC tool product revenue increased from 43.3% to 46.10% in 20202021
Behind the expansion of high-end products, on the one hand, is the market demand for import substitution. According to the statistics of China Machine Tool Industry Association, in 2020, the consumption scale of China's cutting tool market was 42.1 billion yuan, and the imported cutting tools (including the production and sales of imported cutting tools in China) was 13.1 billion yuan, a year-on-year decrease of 3.7%. At the same time, the epidemic also provides an opportunity. According to the Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) annual report, the import business of some high-end CNC blades in Europe, America, Japan and South Korea has been hindered due to the covid-19 epidemic, and the willingness of end users to choose domestic blades has been increasing. Under this background, the company's operating revenue in 2021 increased by 55.5% year-on-year.
On the other hand, compared with traditional cemented carbide products, high-end products are less affected by tungsten price fluctuations Oke Precision Cutting Tools Co.Ltd(688308) annual report indicates that direct materials account for 40% of the cost of CNC tool products, and there is no obvious linkage relationship or transmission mechanism between the price change of upstream raw materials and the price change of products Chongyi Zhangyuan Tungsten Co.Ltd(002378) the above person told the financial Associated Press, "high-end cemented carbide products may be less affected by the price of raw materials. They are high value-added products, and their prices are more related to technology".
In addition, the financial Associated Press reporter noted that in the field of traditional cemented carbide products, company orders were affected with high prices The Oke Precision Cutting Tools Co.Ltd(688308) annual report shows that Q4 company achieved a revenue of 232 million yuan in 2021, down 11.79% month on month. In this regard, the company said in the investor interaction that on the one hand, due to the adjustment of product structure, on the other hand, due to the high price of raw materials, downstream cemented carbide products customers have a certain inventory, and orders slow down, resulting in the decline of cemented carbide products revenue.
