Tungsten reduction, tungsten concentrate prices rose space. Recently Tungsten Industry Association meeting decided that the strict implementation of tungsten ore mining total control of the relevant industry regulatory policy, continue to control the production capacity, reduce production, 2016 tungsten concentrate production fell by 15%, key enterprises main mining tungsten concentrate production and associated comprehensive utilization of tungsten production a total reduction of 1 million tons, and continue to implement commercial reserves of tungsten concentrate, apt and tungsten products. According to 2015 140 thousand tons of tungsten concentrate production calculation, this year plans to cut 20 thousand tons to 120 thousand tons. We believe that tungsten as a national strategic resources of metals, supply concentration, the output value is relatively small, or is expected to become the supply side of the reform of the dominant species. According to our estimates, the full cost of domestic large and medium-sized tungsten between 8-8.5 million, from the tungsten concentrate market price 68000 yuan / tons are still 23-25% upside down space. We believe that with the purchasing and storage, supply side reforms and high-end manufacturing industry upgrading and stimulating demand for tungsten alloy, tungsten concentrate remains for the future space increases, leading enterprises profitability will fully benefit from the upstream concentrate prices.
Re purchasing and storage and drives the price slightly upward or hitting the policy. The light rare earth representative varieties of neodymium transactions prices in 33 million / ton, heavy rare earth dysprosium, terbium clinch a deal the price respectively between 180 and 300 million / ton, are in the bottom area of the history. The main reasons are: (1) demand is relatively stable. About 30% rare earth downstream consumption from the material, 15% from petrochemical catalyst. Total rare earth consumption growth of about 2%, relatively stable. (2) the supply side is out of order, and it is in urgent need of reform. The repeated prohibition of private mines is the main factor that affects the return of rare earth price. We believe that with the completion of the integration of six rare earth group, rare earth supply side reforms is expected to break the ice catalyst mainly two aspects: (1) cash storage can effectively clean up the industry within the accumulation of inventory, improve market expectations. (2) the government or the introduction of further measures to combat the black industry chain of rare earth, to curb the supply of rare earth from the source.
Continued attention to China's strategic advantage of the supply side of the supply side of the price of the reform of the price rally. We believe that compared to the industrial metal, with China's strategic advantage of small metals such as tungsten, rare earth will be more significant benefit from the supply side of the reform brought about by the price rebound. The concrete logic lies in: (1) tungsten and rare earth belong to the "China for the world" of the dominant species, China's Tungsten output more than 84% of the world, rare earth close to 90%. Supply side control is relatively easy. (2) the output value is relatively small. 2015 China tungsten industry sales revenue of about 75 billion, the rare earth industry sales revenue less than 70 billion, the reform of smaller resistance. (3) the application of tungsten and rare earth is more distributed in the emerging industries and military, strategic significance. Therefore, we continue to favor the advantage of small metal prices rebound, concerned about the proposed Xiamen tungsten, high-tech tungsten, Guangsheng nonferrous, Sheng and resources.