Affected by the rise in raw materials, Zhangyuan Tungsten Industry (002378.SZ) recently announced to adjust the price of cemented carbide products.
Financial Associated Press reporters learned that due to the high price of tungsten and cobalt leading to rising costs, a number of companies have recently raised the prices of some cemented carbide products. In the future, affected by supply and demand, tungsten and cobalt prices may also be high, while the downstream demand of tungsten metal is more rigid, and related enterprises have full orders, or form support for price increases.
The price of cemented carbide is Puti at the beginning of the new year.
Cemented carbide is a kind of alloy material made of carbide powder of high hardness refractory metal and binder of cobalt, nickel and molybdenum. It has a series of excellent properties, such as high hardness, wear resistance, good strength and toughness. It is mainly used in cutting tools, stamping tools, moulds, mining and road construction machinery and other fields.
On January 8, Zhangyuan Tungsten Industry issued a notice on product price adjustment through its official Wechat official account, saying that the company's costs have increased significantly due to the recent rising prices of tungsten and cobalt cemented carbide raw materials. The company will implement cemented carbide products according to the new prices from January 18, 2002.
The Financial Associated Press reporter learned from multiple interviews that recently there are a number of companies in the industry that have raised the prices of cemented carbide products.
A person from the securities department of 688059.SH told the financial news agency that some of its cemented carbide products had raised prices by about 2 per cent in early January.
A person from the Securities Department of China Tungsten High-tech (000657.SZ) said to the Financial Associated Press that according to its understanding, some cemented carbide products in the industry have raised prices recently, but the company covers a wide range of cemented carbide products, and there has been a round of price increases in mid-October last year, and the price increase has not been notified yet.
A person from the securities department of Zhangyuan tungsten industry told the Financial Associated Press that according to its understanding, other companies have raised prices for cemented carbide products according to market conditions.
The price of tungsten and cobalt continued to rise in the fourth quarter.
For this round of price increases, most companies said that the prices of tungsten and cobalt, the main raw materials, continued to rise. Soochow Securities research report shows that the cost of cemented carbide raw materials accounts for about 90%, of which tungsten raw materials account for about 80%, cobalt accounts for about 10%.
According to the data of the world rare metal network, the price of tungsten carbide has risen from 191.5 yuan / kg to the highest 260yuan / kg since November 2020. Since the end of December, the price of tungsten carbide has risen again.
Luoyang Molybdenum (603993.SH) Securities Department told the Financial Associated Press that the output of tungsten, as an associated mine, decreased year by year. Production and electricity restrictions in October last year had a certain impact on output, superimposed by manufacturers starting maintenance in the fourth quarter, and supply contraction coupled with the impact of overseas epidemics may lead to a sustained rise in tungsten prices.
On the other hand, since October 2021, cobalt prices have continued to rise, and the average spot price of SMM electrolytic cobalt (≥ 99.8% / gold, likes) has increased by 27%.
Zhao Chao, a cobalt industry analyst at Longzhong Information, told the Financial Union that the strong demand for superalloys and battery materials in Europe and the United States, coupled with the tight supply of cobalt overseas, and delays in shipping raw materials under the influence of the epidemic, is the main reason for the current rise in cobalt prices.
The rigidity of demand may support the price increase.
In terms of raw materials, tungsten and cobalt may remain high in the future. Zhao Chao said that the future benefited from the continued release of demand from Europe and the United States, domestic downstream enterprises still have orders to negotiate and sign, it is expected that the short-term cobalt market will also operate at a high level as a whole.
The pricing of cemented carbide products will refer to the price of raw materials. The above-mentioned person told the Financial Associated Press that the pricing strategies of different processing links of cemented carbide are different. Powder products will be adjusted dynamically with reference to tungsten prices, while the gross profit of deep processing links is relatively high, so prices will be adjusted regularly according to the prices of raw materials.
In addition to the high level of raw materials, downstream demand rigidity may also form price support. The above-mentioned person in Zhangyuan tungsten industry told the Financial Associated Press that in addition to costs, downstream demand is also one of the factors to consider price increases. The current situation is that there is no other product to replace the demand for tungsten.
Tungsten Hi-Tech recently revealed in a summary of investor research, the current company cemented carbide product orders are more full, the growth rate of individual products decreased month-on-month, but increased steadily compared with the same period last year.