Jr's with Tungsten to profit in 08Interesting article on Tungsten.
For those of you who aren't aware of tungsten and its massive potential, you need to be.
Tungsten is a metal that has caught fire in the past five years on scorching demand. It has the domestic and global fundamentals to justify increased demand for years to come. To make it very simple, a metric tonne unit (MTU) has gone from $50 an MTU in 2002 to over $250 in 2006 (it currently trades around $250). This metal's supply is dwindling and it is primarily produced and found within the Republic of China.
The major use of tungsten (in the form of tungsten carbide) is in the manufacture of cemented carbides or hard metals. Tungsten became very prominent as early as the 1920's for various applications where its high wear resistance was particularly important. Tungsten has extreme heat and durability resistance. The use of tungsten and the coating of carbide have increased the lifespan and durability of tools and drills more than five times over. Its demand in the mining industry and use for alloy steels is unprecedented and growing. History, along with countless reports clearly document that there has been an increase in demand for the consumption of cemented carbide. The annual world consumption has reached over 30,000 tons per year.
Our team found some convincing information on tungsten and its increased level of demand from an article written by Jack Lifton, titled "The Economics and Politics of Tungsten Mining Investing in North America." The below excerpt reads:
"In 2005 we imported only 47% of our tungsten needs, directly, from the PRC (Peoples Republic of China). In January 2007, the U.S. Geological Survey (USGS) reported officially that the figure for 'direct' imports was 75%, and, if you add to that number that portion of "The U.S. imports for consumption of tungsten by country" that most likely originated in the PRC you get a realistic and disheartening 90%!"
Just last week on January 5th, an article published by Interfax China based out of Shanghai reported some key facts. On Wednesday January 2nd the China Tungsten Industry Association stated that the Ministry of Commerce (MOFCOM) issued the first batch of tungsten product export quotas to domestic companies for this year, allocating 10785.55 tonnes of tungsten metal content in a variety of forms, down 10.2% when compared with last year's first batch of quotas.
It is important to understand that China is the world's largest tungsten producer and exporter. Demand for tungsten is skyrocketing and China has a stranglehold on global tungsten production with a desire to keep the metal for their own use.
In June 2007, China made plans to increase the export tax on tungsten products in an attempt to protect the scarcity of this global mineral resource.
How much did they increase taxes?
China imposed export taxes varying from 5% to 15% on primary tungsten products on Jan. 1 this year, including APT, tungsten carbonate, tungsten powder, ferrotungsten and scrap tungsten.
What affect do you think this will have on Tungsten's long-term value?
Juniors with a proven tungsten resource will be highly sought after by majors in North America as our collective governments look to decrease dependence on foreign importation. We encourage you to research tungsten on your own time as there are very few natural resources in North America. Our team strongly believes this metal's demand will only increase.