Challenge, Opportunity & Tuyere of Tungsten Enterprises

MARKET & PRICE TREND OF TUNGSTEN CHINA, 2021

PART IV of VII

Challenge, Opportunity & Tuyere of Tungsten Enterprises

The first part of this paper analyzes the impact of macroeconomic environment factors on the processing and production of tungsten products. The second part further analyzes various cost factors that directly and deeply affect the production and operation links of tungsten product prices, and reveals the deep-seated causes of price fluctuations since June and the irreversible impact on the future. The third part analyzes the spillover effect of tungsten product price rise in the fourth part, CTIA attempts to make a superficial analysis on the future opportunities, possible outlets and breakthrough ways of small and medium-sized enterprises of China's tungsten industry.

Although the tungsten products industry is facing the impact and challenges of the macroeconomic environment at home and abroad, the fierce competition in the industry and the competition of emerging industries and products outside the industry against the existing market; At the same time, China's tungsten industry is also facing opportunities and serious challenges from network economy, digital technology and intelligent manufacturing. Therefore, we should recognize the current industrial macro political and economic environment, meso industrial policies and industrial status, micro industry development and fierce competition, and formulate appropriate development strategies and technical and tactical plans, adjusting measures to local conditions and doing a good job in the production, operation and management of enterprises is an essential way of development and survival.

With new economy, new energy and new infrastructure as the main tone, China's rapid economic development and manufacturing advantages have been further confirmed and strengthened since the outbreak of the epidemic and the severe situation of prevention and control in 2020. China's tungsten industry is also facing the opportunities and challenges of transformation and upgrading in the process of new energy and new infrastructure, Facing the new demand increment of tungsten products industry and the opportunity of product transformation in the process of transformation and upgrading of new economic business forms.

1. New Energy Technology Innovation

New energy (NE), also known as unconventional energy, refers to various forms of energy other than traditional energy (widely used conventional energy such as coal, oil, natural gas and hydropower). The United Nations "United Nations Conference on new and renewable energy" in 1980 The definition of new energy is to modernize the development and utilization of traditional renewable energy based on new technologies and materials, and replace fossil energy with inexhaustible and recurring renewable energy with limited resources and polluting the environment. New energy generally refers to renewable energy developed and utilized on the basis of new technologies, including solar energy, biomass energy and wind energy, geothermal energy, wave energy, ocean current energy and tidal energy, as well as the thermal cycle between the ocean surface and deep layer; in addition, it also includes hydrogen energy, biogas, alcohol, methanol, etc. The International Energy Agency recently released the 2020 energy technology outlook report After in-depth analysis of more than 800 emission reduction technologies, based on the calculation of facility transformation and consumer behavior transformation, the global power consumption will be 2.5 times that of the current by 2050. In order to meet the new power demand in the future, the average annual new installed capacity of global renewable energy needs to reach 700gw within 30 years, four times that of 2019.

At present, the key fields of new energy development in the industry are solar energy, wind energy, biomass energy, tidal energy, geothermal energy, hydrogen energy and nuclear energy (atomic energy), with the limitation of conventional energy and the increasingly prominent environmental problems, new energy characterized by environmental protection and renewability has attracted more and more attention from all countries. The awareness of new energy industry in global environmental protection has been enhanced, and carbon neutralization and carbon tax measures have been gradually implemented and implemented more and more strictly. Therefore, new energy will become a new outlet for China's tungsten products industry, which will make China's tungsten products The industry faces two opportunities.

1.1 Development of New Energy Industry

In the process of large-scale development and production of new energy industry, a large number of cemented carbide products such as mining tools, cutting tools and tool molds will be consumed. This is a new blue ocean outside the traditional application field of cemented carbide products, which will greatly improve the consumption of cemented carbide products with the development of new energy. During this period, it will inevitably pose new challenges to cemented carbide production and promote relevant enterprises at the same time, the special glass, mechanical parts, seals and other products of the new energy industry will greatly increase the demand for facilities and equipment such as metal tungsten heating components, boats and containers, as well as electrical and electrical facilities and heat conducting parts such as tungsten alloy and tungsten copper alloy.

1.2 Application of New Energy Industry

The application field of new energy industry involves a large number of solar energy collection panels. In the process of technological upgrading to continuously improve solar energy utilization efficiency, tungsten compound products are increasingly used in various solar glass production and glass coating. At the same time, there will be a great market space in the field of agricultural greenhouses, smart glass coating and other solar energy utilization fields, which will be widely used in China's agriculture The upgrading and transformation of production technology, the increase of national investment in agricultural industrial policies, the western agricultural development and the efficient agricultural utilization of land resources will bring new application markets to the field of special oxides.

Since most fields of new energy, such as solar energy, wind energy, wave energy, ocean current energy and tidal energy, do not belong to base load power, they are affected by natural conditions such as weather, season, ocean wave and ocean current, and have natural instability defects, the R & D and construction of nuclear power based on nuclear fusion and nuclear fission and China's leading Tokamak device will have an impact on high temperature resistance, it also puts forward higher requirements for China's tungsten alloy production technology and processing capacity, which will be a good development opportunity for high-performance tungsten alloy production enterprises.

1.3 New Energy Vehicles (EVs)

As mentioned above, the development of new energy vehicles and all kinds of new energy public transport vehicles avoids the use of a large number of tools in the field of traditional fuel engines, which is bound to greatly reduce the consumption of cemented carbide. At the same time, the tools and molds required by the new energy vehicles will also offset the shrinking market of cemented carbide tool consumption. More importantly, the most important thing in the field of new energy the most important thing is the energy storage battery, which is also an essential part of almost all new energy storage.

According to the research report, SNE research, a global emerging energy market research organization, predicts that by 2023, the global demand for power batteries for electric vehicles will reach 406 Giga watt hours (GWH), while the power battery supply is expected to be 335 Giga watt hours (GWH), the gap is about 18%. By 2025, this gap will expand to about 40%.

Recently, major battery manufacturers in China, such as CATL (Contemporary Amperex Technology Co., Limited) and BYD Company Limited, and new energy battery materials’ manufacturers, such as Ganfeng Lithium, Nanjing Hanrui Cobalt Co., Ltd and Xiamen Tungsten, are facing huge market outlets and continuous demand. Their sales performance and stock price are rising rapidly one after another.

In the recent research and application development of battery technology, special doped tungsten oxide, nano oxide and rare earth mixed compounds of tungsten have greatly improved and improved the safety, rapid charge and discharge, energy storage efficiency and other performance of new energy batteries. Therefore, with the development and evolution of new technology and the maturity of production technology, special tungsten chemicals will have a great market promotion space.

2. Investment & of New Infrastructure

The construction of new infrastructure, referred to as new infrastructure for short, mainly includes the construction of 5G base station, UHV, intercity high-speed railway, urban rail transit, charging pile of new energy vehicles, big data center, artificial intelligence and industrial Internet, involving many industrial chains. The new infrastructure is oriented to high-quality development with the concept of new development, driven by technological innovation and based on information network In March 2020, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting to speed up the construction of new infrastructure such as 5G network and data center, and the 2020 government work report of the State Council proposed to focus on supporting "two new and one heavy" (new infrastructure construction, new urbanization construction, transportation, water conservancy and other major projects) construction. According to the first batch of 48 major projects implemented in Shanghai from 2020 to 2022 alone, the total investment is expected to reach 270 billion Yuan. China's new infrastructure will be driven by tens of trillions of investments and huge surrounding industries, and will also inject a huge driving force into China's future economic development.

The current new infrastructure defined by the national development and Reform Commission mainly includes three aspects: (a) Infrastructure based on the evolution of new generation information technology, such as communication network infrastructure represented by 5G, Internet of things, industrial Internet and satellite Internet, new technology infrastructure represented by artificial intelligence, cloud computing and blockchain, and computing infrastructure represented by data center and Intelligent Computing Center; (b) Apply Internet, big data, artificial intelligence and other technologies to support the transformation and upgrading of traditional infrastructure, so as to form integrated infrastructure, such as intelligent transportation infrastructure, intelligent energy infrastructure and other in-depth integrated infrastructure; (c) support public welfare innovation infrastructure such as scientific research.

According to relevant industries and plans, China's new infrastructure is currently at the forefront of the world in many fields, and the technology represented by 5G is in the leading position in the world. Relevant infrastructure construction is also independent and the construction speed is constantly strengthened. China's tungsten products industry will face a strong outlet for new infrastructure and take off strongly in the future.

2.1Infrastructure Generated by the Evolution of New Information Technology (IT)

The infrastructure generated by the evolution of the new generation of information technology includes the communication network infrastructure represented by 5G, Internet of things, industrial Internet and satellite Internet and its surrounding application industrial chain, forming new technology infrastructure represented by artificial intelligence, cloud computing and blockchain, and computing infrastructure represented by data center and Intelligent Computing Center In the new information technology industry chain, the tungsten products industry will make great achievements in the construction and application of a new generation of information technology infrastructure and obtain a great opportunity for its own development. For example, the chip-based silicon material chip production and cutting requires a large number of new metal tungsten molybdenum (including silicon carbide) sapphire long crystal furnaces, as well as a large number of cemented carbide NC slicing tools.

(A) 5G Base Station Construction

5G (5th generation mobile communication technology) The new generation of broadband mobile communication technology with the characteristics of high speed, low delay and large connection is the network infrastructure to realize the interconnection of man-machine and things. Its three application scenarios are enhanced mobile broadband, ultra-high reliable low delay communication and massive machine communication. 5G will solve the problems of people and people in the application fields of Internet of things such as mobile medical treatment, Internet of vehicles, smart home, industrial control and environmental monitoring Communication between people, people and things, and things and things.

Compared with other countries in the world, the R & D and infrastructure construction of 5G communication technology in China are moderately ahead of the layout. The construction of 5G technology based on mobile communication has developed rapidly in the fields of big data center, 5G enabled Industrial Internet and deep integration of artificial intelligence, thus creating a historic opportunity in the new round of scientific and technological revolution and industrial reform And then promote the integrated development of the new generation of information technology and manufacturing industry, accelerate the digital and intelligent transformation of industrial enterprises, improve the digital, networked and intelligent development level of manufacturing industry, promote the transformation of manufacturing mode, production mode and enterprise form, and drive industrial transformation and upgrading.

The core of 5G communication technology is high-speed, high-quality and large-scale mobile communication. Its industrial upgrading will drive a series of new industrial demand mainly for cutting tools and molds. Taking the rapidly developing 3C industry as an example, its rapid growth and renewal iteration have strong demand for production machines and tools and increasing performance requirements. Therefore, it promotes the demand for special cemented carbide PCB precision drill bits in China, At the same time, the demand for high-performance RF antenna will grow rapidly with the construction of 5G high-density, which will make the demand for special tungsten compounds grow at a high speed simultaneously. China Tungsten online has continuously received the customer demand for such special doped tungsten compounds in recent years.

The demand of 5G technology for the hardware of electronic information products such as chips will have a huge demand for the production capacity of tungsten-based alloys dominated by tungsten copper alloys in China. At present, the production capacity of tungsten-based alloys required by China's IT industry, such as tungsten copper heat sink materials and packaging materials, is very small, the flexibility and technical research are relatively slow, and there is still a lot of room for development.

Based on the analysis of this paper, we believe that China's tungsten products industry will face further overcapacity of a large number of standard chemicals in the future, and there will be a large demand for small batch high-performance special tungsten compounds, which can meet the needs of R & D and flexible production of such products, and will also obtain high-speed growth and strong competitiveness.

(B) 6G Technology R & D & Its Application

At present, based on the forward-looking advantages and production and processing capacity of 5G technology, China still has a huge first mover advantage in 6G technology research and patent application, and accounts for more than 40% of the patented technologies. We can predict that 6G technology will educate 5G technology to enter our real life faster, and several 6G software and hardware experts will not make decisive production and application. Therefore, tungsten More and more products will benefit from the application and evolution of 5G-6G technology. Therefore, we can be more optimistic about the development of tungsten products industry driven by the new generation of communication technology.

2.2 Application Internet Convergence Infrastructure

Internet convergence infrastructure based on 5G technology mainly refers to the integration infrastructure formed by the deep application of Internet, big data, artificial intelligence and other technologies to support the transformation and upgrading of traditional infrastructure. The construction of intelligent manufacturing is based on big data and opportunity big data center. Industrial Internet is the industrialization and industrial empowerment of intelligent manufacturing.

China's tungsten products industry, especially small and medium-sized tungsten products manufacturing enterprises, has not yet built their own big data center, nor has there been a perfect intelligent manufacturing planning and implementation, which will make many tungsten products industries in China face data fragmentation, make it difficult to embed them smoothly into the digital economy and industrial Internet, and make it difficult to realize the maximum intelligent manufacturing format. It is the lack of data and integration of the current industrial chain that has brought great opportunities for the transformation and upgrading and digital empowerment of China's tungsten products industry, because China's tungsten products industry has resources, technology and huge market advantages. At the same time, the tungsten products industry has a short industrial chain and relatively intensive industrial concentration, which has the possibility and feasibility of forming an industrial Internet in terms of region and products, At the same time, in many enterprises, only industrial and product upgrading based on industrial Internet and intelligent manufacturing can have sustainability and technical advantages.

2.3 Regional Integration Weaknesses

According to the national overall development plan, the new infrastructure includes solving the major infrastructure problems of weak links such as geographical boundary constraints and insufficient regional energy security, as well as the space of economic development advantages such as central cities and urban agglomerations with short board as the main task. For example, accelerate the layout of intercity high-speed railway, intercity rail transit and UHV power hub, comprehensively promote the construction of cross regional infrastructure, and improve the infrastructure interconnection level of central cities and key urban agglomerations.

High speed railway, intercity rail infrastructure based on high-speed railway technology and UHV power transmission and transformation technology are leading industrial clusters with intensive patent technology and mature technology in China. Such industries will greatly promote China's regional development imbalance, regional cooperation and regional interoperability, and will also be an important measure to promote common prosperity, this will also generate new incremental and high-quality development impetus for China's cemented carbide, tungsten copper alloy and other products.

3. Medical & Health Industry

In the process of China's rapid urbanization, the original distribution pattern of medical resources and inclusive population have been changed. The original distribution pattern of medical resources mainly in cities and towns has gradually expanded to low-level medical institutions in the process of China's economic and social progress, and a large number of farmers entering cities also pose a great challenge to urban medical resources, It has completely changed the original pattern of medical people, and medical services pay more attention to the problem of "blue collar health", which will increase the demand for medical resources several times compared with the original.

With China's gradual entry into an aging society, the medical needs of society and individuals will expand rapidly. At the same time, the society also puts forward higher requirements for medical quality. In recent years, China's high-end medical treatment has been sinking, and medical means such as CT, X-ray and laser have been fully entered into county medical centers and even township medical services.

The demand, normalization and popularization of radiation medical treatment for various cancers will greatly increase China's radiation medical equipment. Regardless of domestic and foreign medical equipment, the demand for tungsten alloy parts shielding radioactive sources will eventually come from the processed products of China's tungsten products industry, even if the final finishing processing is not in China, according to the market experience and customs data analysis results of China Tungsten online for many years, most tungsten alloy shielding parts come from Chinese tungsten products processing enterprises. Therefore, we believe that the rapid growth of China's huge medical market, the demand for medical quality such as precision treatment, and the rapid integration and popularization of remote Internet medicine will bring great demand increment and technical upgrading requirements to China's tungsten industry.

4. Military & Aerospace Industries

Under the situation of many years of containment and suppression by the west, China has long adhered to the independent road of military and aerospace development. With the arduous efforts of several generations, China's military science and technology research and development have achieved fruitful results. We have achieved major breakthroughs and considerable development in various fields of land, sea, air and space, and all kinds of important weapons of various types of countries continue to emerge.

According to the reading and analysis of relevant new_s by China Tungsten online, most of the high-performance tungsten alloy kinetic energy armor piercing bullets, armor breaking bullets and tracer bullets, large-diameter special rifle bullets in the field of China's army are processed and produced with rotary forged tungsten alloy rods, and their performance catch up with or even surpass the similar products of major western developed countries, and China adheres to the "green bullet" The guiding ideology of the National People's Congress should avoid the old way of using depleted uranium (DU) bombs with radioactive damage that seriously endanger the environment and civilians in Iraq, Kosovo and other places. At the same time, tungsten alloy prefabricated fragments are widely used in individual blasting, shells, rockets and so on.

In terms of air military, China also uses a large number of high-performance tungsten alloys doped with rare earth. For example, the ahid high explosive bomb first developed by Switzerland uses a large number of tungsten alloy Nuggets between 3x3x3 ~ 6x6x6x6 as lethal blasting particles. At the same time, tungsten alloy components with high density and high strength are required for ground penetrating bombs for the air force.

Tungsten alloy is also widely used in naval weapon systems and sea to shore weapon systems. At the same time, tungsten alloy is an excellent guidance gyroscope material, tungsten copper alloy sweating material is also an excellent heat dissipation material for rocket and aerospace engine nozzles, and so on. China's tungsten products industry has actively participated in the research and development of dual-use technology in the process of enriching the country and strengthening the army, it has made and will continue to make significant contributions to China's national defense.

END OF THE PART IV OF VII OF THIS PAPER.

THE 5TH PART OF THIS PAPER, THE AUTHOR WILL ANALYZE THE ADVANTAGES & DISADVANTAGES OF LEADING, SMALL & MEDIUM-SIZE ENTERPRISES IN TUNGSTEN INDUSTRY, SO AS TO FIND A WAY TO BKREAK THROUGH FOR SMALL & MEDIUM-SIZE ENTERPRISES OF CHINA.

(to be continued)

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"MARKET & PRICE TREND OF TUNGSTEN CHINA 2021"

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