MARKET & PRICE TREND OF TUNGSTEN CHINA, 2021

PART III of VII

Problems, Risks of Tungsten Industry of China

The first and second parts of this paper analyze the macroeconomic environment impact of tungsten product processing and production, the reasonable factors of tungsten product cost rise and the market reasons based on economic rationality. This part further analyzes the possible spillover effect of the sharp rise in the price of tungsten products, and the problems and risks faced by the tungsten products industry chain, especially small and medium-sized enterprises.

1. Price Outlook of Tungsten Products

1.1 Short- & Medium-Term Trend Forecast of Tungsten Product Price

Based on market supply and demand, prices of relevant raw and auxiliary materials and peripheral products, macroeconomic data and psychological expectations of the buyer and the seller, China Tungsten online began to predict that the price of tungsten products will face a price rise process last Monday. It is expected that the quotation of main tungsten products last week will rise by 3-5%. Tungsten concentrate is more than RMB100,000 Yuan per ton, while APT is more than RMB150,000 Yuan per ton, The price of medium particle tungsten powder will be more than RMB233 Yuan per kilogram. As of this week, the actual transaction price of tungsten products market confirmed the accuracy of this questionable forecast.

Looking at the overall price trend of tungsten products in history and its relationship with macro economy (GDP), our analysis shows that unless there is the sudden impact of the black swan incident, the price of tungsten products will rise gradually in a short term, reaching a high point after an overall increase of 20% from the end of 2021 to the beginning of 2022; In the medium and long term, the price of tungsten products shows a rising trend of fluctuation curve. From the end of the 14th five-year plan to the beginning of the 15th five-year plan, it is generally about 40%, which is in line with the overall economic development and relatively reasonable.

In the short term of 2021, according to the above analysis, the rate of international vaccine implementation has gradually increased, countries have begun to unseal, the United States, Japan and South Korea and other regions have gradually implemented the 14-day quarantine restriction of the contact vaccine workers, and COVID-19 will gradually become influenza, which will gradually reduce the impact on the world economy. The world economy will gradually change from China's dominance to a comprehensive recovery and overall growth. At the same time, the excessive currency issued by western countries led by the United States due to the epidemic will inevitably be transmitted to the Chinese market in the form of imported inflation in the future. Therefore, macroeconomic factors will play a long-term role in supporting the price of Chinese tungsten products with an absolutely dominant position, this has been reflected in the prices of other metals.

As the raw materials of small metals such as molybdenum, tin and cobalt, the price of tin ingots has increased significantly since 2021: the price of tin ingots has risen from RMB150,000/MT to about 200,000/MT; Molybdenum ore also rose from RMB1,500/MT degree to more than 2,000/MT degree in 2021. Although it has been slightly adjusted at present, its prices have increased by 30% - 40% simultaneously with bulk metal raw materials. The price of tungsten products, which has been low for a long time, has only increased slightly by about 15%, which not only does not reflect the scarcity and irreplaceable of tungsten products, there is no reasonable transmission and response to the rising real cost of other products. Based on this, we judge that tungsten products still have an average rise of about 10% without a significant correction in the economy and the Fed's short-term interest rate policy unchanged.

In the medium and long term, we believe that China's economy will continue to grow steadily and rapidly, the manufacturing industry will gradually develop to intelligent manufacturing and high-end industries, the economic volume will become larger and larger, and the proportion in the overall volume of the world economy will become higher and higher; At the same time, with the increase of national income, the domestic consumer market still has a lot of room to rise, and China's manufacturing industry will still be in the growth period of domestic and foreign demand for a long time. In the growing macroeconomic environment, China's manufacturing industry will also grow rapidly. On the basis of traditional industries, the demand for all kinds of tungsten products will also benefit from the demand of emerging industries. In the long run, tungsten products, as an indispensable tool product for industrial enterprises, will also grow simultaneously, the offsetting effect of the gradually withdrawn industry and recycled tungsten products on the market will not have a significant impact on the price of tungsten products. Therefore, we speculate that at the end of the 14th Five Year Plan period, China's tungsten products are promising for a long time and are expected to increase by 25-30%.

1.2 Spillover Effect of Price Rise of Tungsten Products

According to the experience in the past decades and the current industrial situation, it is not difficult for us to draw the following conclusions. If the price of tungsten products is too high, several market spillover effects may occur:

(A) Profitable imported ore may become a balancing factor in the domestic tungsten concentrate market. At the same time, it also has a great incentive for domestic market participants with mining and primary smelting capacity and technology to go abroad to find ore and mine, which affects the domestic mining, production and processing capacity.

(B) The import, recycling and processing of tungsten wastes have become profitable businesses, so that the recycled materials that can be mass produced by zinc melting method can expand the market share, thus affecting the raw ore market of tungsten concentrate and reducing the price of raw materials of tungsten products.

(C) Taking a domestic tungsten molybdenum companion ore as an example, if the price of tungsten products continues to be high, it will gradually increase the mining and separation capacity of some associated ores containing scheelite and low-grade black-and-white tungsten ores, so as to get a share in the tungsten products market.

(D) At present, many ceramic materials, graphene and their derivatives have shown their substitutability for cemented carbide in the field of tool application. If the price of cemented carbide is gradually pushed up, it is believed that the substitutes of tools will have a certain inhibitory effect on the tungsten product market.

(E) A large number of inventories such as APT left by Pan Asian nonferrous metals exchange that have not been digested by the market may also be put into the market due to the sharp rise in the price of tungsten products, which will have a great impact on the market supply.

(F) in the middle and late June, the national development and Reform Commission and the State Administration of market supervision successively sent joint working groups and research groups to investigate the supply and price stability of coal market, iron ore spot market and urea market. At the same time, the national development and Reform Commission and other departments frequently made efforts to curb the unreasonable rise of commodity prices, Recently, the State Food and materials reserve bureau also announced that it would organize the release of national reserves of copper, aluminum and zinc. After the implementation of relevant measures, from the perspective of the purchase price index of main raw materials, in addition to the continued rise of petroleum, coal and other fuel processing industries, other industries fell significantly, and the rapid rise of manufacturing prices was initially curbed. The purchase price index and ex factory price index of main raw materials changed from increase to decrease this month, which were 61.2% and 51.4% respectively, 11.6 and 9.2 percentage points lower than that of the previous month. Therefore, we can expect that the state's policy to curb the rise in prices in the short term is firm and timely. If the price of tungsten products rises too much in the short term, or there are obvious non market rational operations, the State Food and materials reserve bureau will certainly put in tungsten concentrate inventory in time to increase market supply and stabilize the market price of tungsten products.

2. Problems Faced by Tungsten Industry

Statistics show that in the first half of 2021, China's original excess capacity of tungsten products has been released to a certain extent, especially the mainstream intermediate products. In the first half of 2021, the volume increased significantly, with a year-on-year increase of more than 40%, and the total volume reached nearly 70000 tons. According to the statistical data of China Tungsten Association, the total output of tungsten concentrate in China in 2020 is less than 140000 tons, of which 90% of tungsten concentrate is consumed by APT production, which highlights the serious overcapacity of APT in China. According to China Tungsten online statistics, the existing capacity of APT in China is no less than 200000 tons, while only about 50% are actually produced after commencement, which confirms the tight supply of tungsten concentrate market, Firstly, the price is high, while the back-end APT price is relatively low, which is due to the tight supply of tungsten concentrate last week (late June 2021).

The main consumer of APT，the end tungsten powder and subsequent product tungsten carbide powder in the first half of 2021, the output of tungsten powder increased by more than 30% year-on-year. The situation of ferrotungsten is also similar to APT, and the total production volume also reached about 5000 tons due to the high economic demand of the iron and steel industry. Due to the overcapacity of intermediate products, China's tungsten products industry has been in the buyer's market with excessive supply for a long time, and the price is difficult to increase significantly. Similarly, the processing fee of intermediate products, such as APT, also hovers below 20000, making it difficult to make profits, while the newly invested intermediate smelting enterprises that meet various specifications such as environmental protection are on the verge of loss.

It can be seen that the current overcapacity and output of China's tungsten products industry is the reason why tungsten products have been in a downturn for a long time in the past few years. Although China's GDP has continued to grow at a high speed, the price of tungsten products is much lower than that in 2011-2014, and it is also the reason why the current price of tungsten products has not increased significantly in 2021 The sharp rise in the prices of various commodities did not rise with the boom index.

3. Problems Faced by Tungsten Market

3.1 Impact of Manufacturing Boom

Since 2021, COVID-19 has been increasing rapidly in the first half of the year, but the economic performance of the second half of this year will be affected by the rapid spread and prevention of the new crown pneumonia delta virus, especially in the(a) recovery of foreign markets. There is a great uncertainty in the 1. (b) Recovery and continuity of the domestic consumer market; (c) The main manufacturing indexes show a downward trend, and the future trend remains to be determined by the comprehensive effect of complex factors at home and abroad.

Recently, the prices of some bulk commodities such as iron and steel, copper, aluminum, lead and zinc have risen sharply, which obviously deviates from the fundamentals of supply and demand and exceeds the reasonable range of restorative rise affected by the epidemic. The national development and Reform Commission, the State Administration of market supervision and other departments have frequently sent joint working groups and research groups to investigate the coal market, iron ore spot market In this case, the National Bureau of statistics released data on June 30, which showed that China's Manufacturing Purchasing Manager Index (PMI) was 50.9% in the first half of the year, slightly down 0.1% from the previous month, and continued to be above the critical point, but the high price index fell, The rapid rise in manufacturing prices has been initially curbed. The purchase price index and ex factory price index of main raw materials in this month changed from increase to decrease, 61.2% and 51.4% respectively, 11.6 and 9.2 percentage points lower than that in the previous month. Except that the petroleum, coal and other fuel processing industry is still higher than 70.0% and the ex-factory price of products continues to rise, the ferrous metal smelting and rolling processing industry, nonferrous metal smelting and rolling processing industry have decreased significantly, all fell to the contraction range.

3.2 Market Drivers of Electricity Price Increase

Since the reform and opening up, especially since China's entry into WTO, China's manufacturing industry has catch up from behind, and has been the most important place in many fields. Last year, COVID-19's strength in manufacturing industry was strengthened. This is mainly due to the fact that China's large-scale power generation and transmission and transformation enterprises are basically state-owned enterprises, which have implemented the national cross subsidy policy of separate pricing of residential and commercial electricity for a long time, but whether this policy can be implemented for a long time is unknown. In addition to the low cost of China's large-scale hydropower generation, China's new energy the proportion of clean energy, such as photovoltaic, wind energy and natural gas, will be higher and higher. This kind of energy is not basic electricity, and the cost is relatively high. In order to complement traditional energy and make long-term profits and sound development of power enterprises, it may be necessary to increase the price of industrial and commercial electricity when it is inconvenient for residents to significantly increase the price of electricity, This can not only further promote the marketization of the power industry and more truly reflect the costs and interests of all parties, but also promote residents and enterprises to save and reduce and control energy consumption under the condition of high electricity price.

If the electricity price increases in the future, it can be predicted that most of it will be borne by industry and commerce, because in the game among power enterprises, residents and industrial and commercial users, power supply enterprises need to obtain income and the basis for sustainable development in the future through full marketization; The rise of civil electricity price involves all aspects of society and non market factors such as social stability; Therefore, industrial and commercial enterprises will eventually become the main bearers of power prices under the principles of market fair trade and social responsibility.

The tungsten molybdenum products industry, which takes electricity as the basic power and important cost, will inevitably have too high production cost due to the rise of electricity price, which will be reflected in the final product price.

3.3 Deceleration of Domestic Track Construction

Referring to the relevant network news, the relevant standard requirements for applying for subway cities in the opinions on Further Strengthening the planning and construction management of urban rail transit (Draft) issued by the national development and Reform Commission are as follows: the general public budget revenue is more than 30 billion Yuan, the regional GDP is more than RMB 300 billion Yuan, and the urban permanent population is more than 3 million people. The requirements for GDP and fiscal revenue are three times that of 15 years ago, and the financial contribution proportion of urban rail transit projects in cities with government debt ratio of more than 100% and 120% in the previous year shall not be less than 60% and 80% respectively; For cities with a government debt ratio of more than 150%, the provincial development and reform department shall not approve new construction projects. In addition, the draft also makes new requirements for the application for the construction of light rail cities: the general public budget revenue is more than 15 billion Yuan, the regional GDP is more than 150 billion Yuan, and the urban permanent population is more than 1.5 million. The draft also proposes that the initial passenger transport intensity of the proposed subway and light rail lines should not be less than 7000 person times and 4000 person times per kilometer per day respectively. The long-term passenger flow scale shall reach 30000 people and more than 10000 people in one-way peak hours respectively.

Therefore, we do not know the current progress of track projects in Yantai, Nanning, Hohhot, Baotou, Kunming, Xi'an, Lanzhou, Shenyang, Harbin, Guiyang and Urumqi, However, at least we can conclude that the state has more rational management ideas and scientific planning for the urgency of track construction, the financial affordability of local governments and the actual transport capacity. Therefore, the strict management of track projects that consume a lot of cemented carbide products and the gradual reduction of new project investment are bound to have a negative impact on the overall consumption of tungsten products.

3.4 Subversion of New Energy Vehicles to the Automotive Industry

Like 3C products, traditional fuel vehicles consume a large number of cemented carbides cutting tools, which has driven the consumption of steel and tungsten products for a long time. However, due to increasingly strict emission requirements and more and more regulated vehicle emissions, various countries have set carbon neutralization targets for this century, giving birth to the development and application of new energy, Traditional fuel vehicles, the main force of mass energy consumption, have become the target of public criticism. Their substitutes, new energy vehicles, have experienced a blowout growth in recent years, not only the rapid rise of Tesla and Xiaopeng’s new energy vehicle brands, but also the continuous introduction of their own new energy models by traditional automobile manufacturers, Moreover, Audi and other manufacturers have made clear the timetable for stopping the sale of traditional fuel vehicles.

The biggest difference between traditional fuel vehicles and energy vehicles lies in their different power supply methods and transmission devices. Manufacturing these engines and transmission devices requires a lot of complex machining, which is one of the reasons why traditional vehicles need a lot of cemented carbide tools and consume tungsten carbide powder, new energy vehicles greatly simplify the fuel transmission drive mode, thus reducing the demand for cemented carbide tools. Therefore, in the foreseeable future, with the continuous technological progress of new energy vehicles and the popularity of AI automatic driving software and charging piles, fuel vehicles will soon withdraw from the historical stage, and the cemented carbide tool industry will also face a huge challenge

3.5 Competition Among Graphene, Cermets & High Entropy Alloys

(A) Graphene

With the gradual breakthrough of mass production and large-scale problems, as a new material with hybrid connected carbon atoms tightly stacked into a single-layer two-dimensional honeycomb lattice structure, graphene has excellent optical, electrical and mechanical properties, and has important application prospects in materials science, micro nano processing, energy, biomedicine and drug delivery, The main applications with strong competitiveness with all kinds of tungsten products are known research achievements such as new energy batteries, hydrogen storage materials, aerospace, photosensitive elements, composites and so on.

Graphene new energy cells and hydrogen storage materials will replace the application of nano tungsten oxide in new energy cells, which has not been widely promoted and market applied at present. In particular, the flexible photovoltaic panels with graphene nano coating can greatly reduce the cost of manufacturing transparent and deformable solar cells, this has a great impact on the application of tungsten oxide in photovoltaic field; Graphene composites are an important research direction in the application field of graphene. In addition to their excellent properties in the fields of energy storage, liquid crystal devices, electronic devices, biomaterials, sensing materials and catalyst carriers, the research of graphene composites mainly focuses on graphene polymer composites and graphene based inorganic nano composites, Many special properties of graphene reinforced bulk metal matrix composites, graphene made multidingal polymer composites and high-strength porous ceramics make graphene have broad application prospects in replacing tungsten based materials.

(B) Metal Cermets

Cermets, which is composed of one or more ceramics and metals or their alloys, is a heterogeneous composite material. It has the toughness and bending resistance of metals and ceramics, and the latter has some advantages such as high temperature resistance, high strength and oxidation resistance. Cemented carbide itself is a kind of cermets. The meaning of cemented carbide itself in English translation has the meaning of ceramics. Metal based cermets are prepared by adding fine oxide powder into the metal matrix, also known as dispersion reinforced materials, mainly including sintered aluminum (aluminum alumina), sintered beryllium (beryllium beryllium oxide), TD nickel (nickel thorium oxide), etc. in a broad sense, cermets also include refractory compound alloy, cemented carbide and metal bonded diamond tool materials.

It has the characteristics of high temperature resistance, high temperature strength, high hardness, good thermal conductivity, high mechanical strength, chemical corrosion resistance, high wear resistance, thermal vibration resistance and good high temperature creep. It has strong substitutability for cemented carbide. This kind of cermets mainly include cermets based on oxides such as alumina, zirconia, magnesium oxide and beryllium oxide; Cermets based on titanium carbide, silicon carbide and tungsten carbide; Nitride based cermets based on titanium nitride, boron nitride, silicon nitride and tantalum nitride; Boride based cermets based on titanium boride, tantalum boride, vanadium boride, chromium boride, zirconium boride, tungsten boride, molybdenum boride, niobium boride and hafnium boride; Silicide based cermets based on manganese silicide, iron silicide, cobalt silicide, nickel silicide, titanium silicide, zirconium silicide, niobium silicide, vanadium silicide, niobium silicide, tantalum silicide, molybdenum silicide, tungsten silicide, barium silicide, etc.

Different from tungsten-based alloys, metals cermet generally has much more excellent characteristics such as low density and easy processing, and have more extensive application and important role in some special fields. Therefore, the impact of cermets on various products of tungsten in the future can not be ignored.

(C) High Entropy Alloys (HEA)

Alloys formed by five or more equal or approximately equal amounts of metals also become multicomponent high entropy alloys and high entropy alloys, also known as high disorder alloys. Entropy is a thermodynamic disorder parameter. The higher the disorder, the higher the entropy. The entropy of a single major element of the alloy is generally between 0-0.69, while the entropy of more than five major element alloys is greater than 1.61, Therefore, it is called high entropy alloy. Its metal elements are between 5 ≤ n ≤ 13, and the percentage of each main element is generally no more than 35%. There are about 30 kinds of multi principal component alloys with 5 ~ 13 Yuan in traditional alloys; The combination of 13 elements from 80 metals into 5-element, 6-element, 7-element... And even 13 element alloy series will expand the saturated traditional single principal component alloy to 7099 multi principal component alloy products, which is a brand-new alloy world. Since the concept of high entropy alloy was put forward in 1995, the research and development achievements of various countries have been surging, with high temperature thermal stability, corrosion resistance, high strength High hardness, high oxidation resistance and excellent magnetoelectric properties make it a new material with great development potential.

Tungsten alloy, whether two-phase alloy, three-phase alloy, high specific gravity alloy or cemented carbide, belongs to traditional alloy products. It is generally produced and processed in the form of tungsten cobalt, tungsten nickel, tungsten nickel iron, tungsten nickel copper, tungsten silver and tungsten copper. Even if Titan and other rare earth elements are added, it can not be regarded as high entropy alloy because the percentage of single element of tungsten is much higher than 35%. High entropy alloy elements are modified with equal or non equal molar ratio and added trace elements, such as NiCoFeCrSiAlTi, MoTiVFeNiZrCoCrPd, CuCo0.5Ni1.2CrAlFe1.5, or CuCo0.5Ni1.2CrAlFe1.5B0.1C0.15. The performance is greatly improved.

Many intermetallic compounds formed between traditional binary or multicomponent alloys will disappear under high entropy effect, The strength of high entropy alloy is better than that of traditional alloy. The fracture resistance, tensile strength, corrosion resistance and oxidation resistance are better than those of traditional alloy. The performance of nano high entropy alloy is better, which makes it have broader application fields and promotion space. It also has the ability to replace hard alloy and other tungsten products in wear resistance, stamping die, cutting tool, hard surface material, corrosion resistant material Photovoltaic and many other fields have more space. The booming research and application of high entropy alloy is bound to bring great impact to traditional tungsten alloy products.

3.6 Cost of Industrial Norms & Standards Risks

(A) Data Leakage Risk

The current common sense makes us understand that even digital giants such as Microsoft, Google, Facebook and Amazon are difficult to resist the endless data requirements from the U.S. government on the grounds of national homeland security. The U.S. government is even interested in "who to talk to" and "what to say". We can imagine, the detailed data of China's tungsten products enterprises obtained by RBA in the United States must be of interest to many U.S. government departments and commercial competitors, and its risk may be far from just commercial competition. When Didi travel was listed in the United States, it was reviewed by the national network information office in accordance with the national security law of the people's Republic of China, the network security law of the people's Republic of China and the measures for network security review. This shows the seriousness and harm of China's enterprise data leakage, and also shows the country's attention to enterprise data security.

(B) Meng Wanzhou's Judicial Problems

Meng Wanzhou, Huawei's CFO detained for a long time, has not been resolved yet. I believe most people in the world know that the reason is only because of Huawei's technology and China's industrial leadership, rather than the so-called Iran. Therefore, China's tungsten products enterprises should clearly realize that in the future, they may also be funded by their own money The data and materials issued by the "responsible" organization make their export goods detained, and even enterprises and managers face Meng Wanzhou style judicial problems.

(C) Additional Cost Burden

All enterprises are the same, and tungsten products processing enterprises are no exception. They are faced with more and more various, including government agencies, civil society, industry associations, domestic and international, various qualifications, inspection fees, inspection fees, annual fees, service fees, membership fees, conference fees, certificate fees, information fees, etc. In recent years, for many nephews and inspectors in the west, if the non production and operation expenses such as due diligence, factory inspection, submission of reports and annual review become higher and higher, it may be a drop in the bucket for large enterprises, but it is not a small burden for many small and medium-sized enterprises in China, and it is also a frost on the snow. We have to say to some extent that most tungsten products are originated in China, which has the final say that China imports little tungsten raw materials, even if imports are basically from Vietnam, is a well-known fact. But at present, it is necessary for an organization in the United States to make the final decision.

3.7 Carbon Footprint & Carbon Tax

In recent years, in the face of China's advantages in tungsten, molybdenum, rare earth and other industries and the carbon tax continuously launched to achieve the goal of carbon neutralization, the carbon footprint of China's tungsten products in the global market has no environmental protection advantages compared with the key materials such as tungsten, molybdenum, rare earth independently developed in Europe and America in recent years. In addition, the West's concern that new energy and other industries are increasingly dependent on China's industry, so it is estimated that China's tungsten products have no environmental protection advantages the industry will face the hidden worry of high carbon tax.

3.8 Anti Dumping

In 1990, the EU began to impose 33% anti-dumping duty on tungsten carbide in China. On December 30, 2009, the EU again launched a sunset review on the case and decided to continue the measure on March 24, 2011. In June 2013, the EU made the final decision of the sunset review on the anti-dumping of tungsten electrodes originating in China and continued to impose a general anti-dumping duty of 63.5% on the products involved imported from China. Previously, it was also the case It is rumored that the relevant industries in the United States have also put forward anti-dumping calls for China's tungsten products. Therefore, for their own interests, Europe and the United States, under the condition of ensuring the smooth import of tungsten intermediate products from China, take anti-dumping measures to levy anti-dumping duties on relevant products in an unfavorable competitive position, so as to curb the export competitive advantage of China's tungsten products, which means that any tungsten products in China Products with competitive advantages in the product industry may face the risk of anti-dumping sanctions in the future.

4. Problems, Difficulties of Small & Medium-sized Tungsten Enterprises

China's tungsten products industry has high overall production capacity, even some products are in surplus, and there is a lack of high-end products. Among them, the difficulties faced by small and medium-sized micro tungsten products enterprises are particularly serious.

(a) Tungsten is a specific mineral for protective mining stipulated by the State Council. Mining requires mining licenses and quotas. Small and medium-sized enterprises are short of funds and do not have the technical strength to control and mine tungsten concentrate resources. Except for large tungsten products enterprises such as China Minmetals, Xiamen Tungsten, Jiangxi Tungsten Group, Zhangyuan Tungsten and Rising Nonferrous Metals, it is difficult for other enterprises to obtain new large mining and mining qualifications.

(b) In view of China's mining rights and total mining volume control system, China's tungsten concentrate is prohibited from export, and tungsten intermediate products also belong to export quota control products. In addition to more than a dozen large tungsten products enterprises successively winning export quotas, small and medium-sized enterprises have little possibility of obtaining export quotas; at the same time, some tungsten products belong to dual-use products, and most of them need to be controlled Export controls.

(c) Due to the inherent financial disadvantages of small and medium-sized tungsten products enterprises, they are constrained and difficult in technology R & D, quality control, product marketing and so on. It is mainly reflected in the poor ability of equipment investment, renewal and replacement, especially the poor technical content and ability of testing equipment and facilities, which leads to low asset quality, low production efficiency, limited production capacity and so on A series of problems; and the more serious consequence of the problems of self owned funds and financing is that it is difficult for small and medium-sized tungsten products enterprises to leave a large self-protection buffer zone in the market with large economic fluctuations and large price rise and fall.

(d) The safety and environmental protection requirements are becoming higher and higher. Due to the small production scale, many small tungsten mines are short of investment to meet the environmental protection requirements, or they simply can not bear the standardized safety and environmental protection investment, they are bound to be closed one after another, and the output of tungsten concentrate will be affected to a certain extent.

(e) Various qualification requirements and procedures, processes, new_s and other red tape have high requirements for enterprises, and many qualifications are difficult to obtain, such as ISO9001, ISO1400 and other certification. The direct consequence is that it is difficult to meet the basic qualifications in the face of bidding of large enterprises, such as CGN, AVIC large aircraft, China Railway and so on.

(f) Human resources are the most important asset of an enterprise. The quality and stability of human resources determine the survival of an enterprise. However, due to the limitations of capital and natural geographical conditions, such as low average salary, relatively remote region, narrow position and salary rise space and other unfavorable factors, it is not attractive to excellent technical and management talents. Due to the weak financial strength and profitability Human resource disadvantage may be the last straw to overwhelm private enterprises under the situation of sharp fluctuations in supply and demand and price of tungsten products market!

END OF THE PART III OF VII OF THIS PAPER.

THE 4TH PART OF THIS PAPER, THE AUTHOR WILL MAKE A SUPERFICIAL ANALYSIS ON THE FUTURE OF CHINA’S TUNGSTEN INDUSTRY, POSSIBLE OUTLETS &THE BREAKTHROUGH WAYS OF SMALL & MEDIUM-SIZE ENTERPRISES.

(to be continued)

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