THE PRICE COMPOSITION & RISING FACTORS OF TUGNSTEN CHINA, 2017

PART IIX OF X

Business Strategy & Determination of China Tungsten Industry

September 7, 2017

The seven articles mentioned in this article have made a mess of the current tungsten product market. Some were praised by everyone yesterday, and some were gently patted. This gives China Tungsten online brick family confidence. While thanking you for your attention, it also feels that it is necessary to write out the unspoken words to repay your attention and care.

Influence of Tungsten Concentrate Price and RMB Exchange Rate on Enterprise Cost

At the moment of the high price of tungsten products, the impact of the foreign trade business environment of the recent sharp decline of the US dollar and the rapid appreciation of the RMB in the short term is superimposed. Most of the domestic tungsten products industry is facing a complex non utilization environment. Tungsten chemical manufacturers with long export orders and tungsten concentrate as raw materials are even worse. Based on the exchange rate of 6.8440 on June 26, the recent highest point of the U.S. dollar, and the price of wolframite concentrate on that day was 82000 yuan / standard ton, we investigated the significant impact of this price rise on the manufacturers of tungsten products mainly engaged in the export of tungsten products.

Based on the above analysis, if the cost of tungsten concentrate accounts for 70% of the production cost of a company, its cost will increase by at least 36%. I believe all people in the industry will believe that no company with intermediate tungsten products as the main product can make more than 36% profit, that is, this price increase plus RMB appreciation makes almost all downstream manufacturers of tungsten concentrate fall into a state of loss.

We can say that this situation is unacceptable and difficult for the industry to continue, because it will seriously damage the development of the industry. The enterprises in it can only choose to temporarily terminate the procurement, slow down the transaction and watch the market change and trend. In this way, the high-level operation of tungsten market can not be maintained for a long time.

In the face of such a situation, many people in the tungsten products industry are flustered, and even lose their direction for a time, or simply choose to quit. Of course, this is in line with natural selection. The survival of the fittest is like the natural law, but what should people who stay for the sake of China's tungsten industry do? I think we should consider our medium and long-term strategies from several aspects:

Business Strategy Make Policy

Read/download the full report: