Between 20 and 22 October, Roskill attended the MolyChina 10th Annual Tungsten & Molybdenum Conference in Chengdu, China. Over 400 people attended covering the entire tungsten and molybdenum supply chain, from upstream mining companies to downstream first use and end use markets.
Below we provide some key take-aways from the conference, held as the Chinese market recovers from the COVID-19 pandemic.
Unsurprisingly, market recovery from COVID-19 became the key topic among conference delegates. According to the MolyChina Tungsten analyst Leisi Qin, first-use cemented carbide production dropped only 0.37% in the first half 2020 compared with last year. Looking at the breakdown, demand for CNC blade and rod material rose 7.8-15.0%, while other applications dropped by between 0.37%-38.0%.
Among end-use markets, the automotive sector did not fare well in Q1. However, as the government started to release incentives, the market bounced back in Q2 and, by Q4, the demand growth rate is set to be positive again. Looking at other end-use sectors, the increasing rollout of 5G base station construction will boost tungsten consumption from the 3C market. Demand from military applications is expected to increase smoothly to around 6-7% (in line with defence budgets) in the near term. In the cutting machine market, Q1 production growth was down 20% Q-o-Q; however, Q2 saw a recovery, up 18%.
Turning to the supply side, from January to August, production of Chinese tungsten concentrate, APT and ferrotungsten dropped by 0.3%, 2.0% and 2.4% respectively y-o-y.
The largest end user for molybdenum is the steel alloy industry, so it is good news that this sector showed a very strong recovery in Q2. MolyChina analyst Zhenyu Wang highlighted strong growth in newly initialised construction for real estate (+145%), automobile production (+87%) and ship production (+56%). This resulted in a stable increase for both production of steel and consumption of molybdenum by the steel sector.
The second largest end user for molybdenum is the chemical industry (in applications such as catalysts, greases/lubricants and corrosion inhibitors). This market is linked strongly with developments in the oil industry. Given oil industry weakness due to the COVID-19 pandemic, as well as tightening environmental policy and expansion of the EV market, the chemical industry’s share of the molybdenum market is likely to remain under pressure going forward.
Roskill’s Tungsten: Outlook to 2029, 14th Edition was published in April 2020, while its NEW Molybdenum: Outlook to 2030, 16th Edition report was published in August 2020. Click here for more information on Roskill’s full range of reports.