THE PRICE COMPOSITION & RISING FACTORS OF TUGNSTEN CHINA, 2017

PART IV OF X

RMB Price Factor of the Price of Tungsten Products

August 31, 2017

Analysis on the cost composition and trend of tungsten concentrate from the exchange rate of RMB against US dollar

Earlier in this paper, we analyzed the price changes and reasons of tungsten concentrate as the basic material and representative from the three aspects of enterprise micro cost and macro strategic pricing of tungsten concentrate, but these do not seem to be enough to fully form the accelerating power of the current sharp rise in price and integrate all elements of tungsten concentrate price, We find that the exchange rate of RMB relative to the US dollar is also a very important driving factor for the price of tungsten concentrate. As for the relationship between the exchange rate of RMB against the US dollar and the cost and price of tungsten concentrate, we investigate from two aspects: the historical price of tungsten concentrate and the change of the historical exchange rate of RMB, and summarize and analyze the reasonable range of the current price of tungsten concentrate.

It is believed that those who have been engaged in tungsten products industry for a long time may remember that the market price of 65% of wolframite concentrate fluctuated and increased from less than RMB 10,000 Yuan per ton in the mid-1990s to RMB135,000 Yuan / ton in 2004, and then it was in a fluctuating and depressed state until 2013 and 2014 (July) In the quarter of, it was close to RMB 145,000 / MT, and then the bottom limit was lowered again. In 2015 and 2016, it continued until the end of July 2017, and the average price was basically RMB 70,000-RMB80,000 /MT.

Trend Chart of Average Price of 65% Wolframite Concentrate in Recent 10 Years

Since August 2017, the price of tungsten concentrate has started the rocket launch mode, rising every day. In the past week, the market price has increased rapidly, and the quotation has changed day by day. On August 30, this paper has increased by RMB 5,000 Yuan compared with yesterday, to RMB 110,000 Yuan per metric ton.

Quotation of Tungsten Concentrate, Tungsten Oxide, Ferro-Tungsten, Tungsten Powder, Tungsten Carbide Powder and Others Tungsten Products of China Tungsten Online on August 30, 2017

The quotation of Chinatungsten online is mainly based on the market quotation, the transaction price of main purchase and sales participants and the expectation of market participants for market trading, and the rational judgment made by integrating many years of market experience and main indicators reflecting the macroeconomic situation, such as GDP, CPI, PMI and other main economic indicators. Therefore, we can think that this quotation reflects the actual situation of the current market, in this view, the price of tungsten products represented by the price of tungsten concentrate this month has quickly approached the historical high. It can be predicted that under the circumstances that the border conflict between China and India has been successfully resolved, the BRICs Xiamen meeting is about to be successfully held, and major institutions in the world have raised or predicted that China's GDP in 2017 will be higher than 7%, if there is no major macro policy adjustment or the black swan event in the industry, it will be a high probability event for the price of tungsten products to reach a record high in mid and late September 2017.

The price of domestic tungsten products is basically priced and traded in RMB. As a currency that has been initially internationalized, the price of RMB itself has domestic price. Citizens can be divided into monetary price and FOB price; Tungsten products, as one of China's important export products for a long time, are often priced in US dollars in international shopping malls. Therefore, it is necessary to investigate the exchange rate relationship between RMB and US dollars to explore the real value of tungsten products.

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