"The American auto giant is in trouble, and we are not good." It is hard to imagine that the executives of a tungsten company in Jiangxi, Zhangzhou, are so concerned about the plight of the three major US auto giants.
On March 20, in an interview with this reporter, Fan Diyu, deputy general manager of Cangyi Chongyi Zhangyuan Tungsten Co., Ltd. said, “Many parts of the car need to use tungsten. The automobile industry looks like this. The demand for tungsten is definitely I can't get it."
Cangzhou is known as the “World Tungsten Capitalâ€, “Tungsten and Rare Earth National Distributing Center and an Important Processing Baseâ€. In the past three years, its tungsten production accounted for more than 30% of the national tungsten production.
Around October 2008, the prices of tungsten and rare earth products dropped sharply, leaving local tungsten and rare earth enterprises in Zhangzhou unprepared. Fan Dizhen told this reporter that "the price of tungsten has fallen, and the general mining costs cannot be guaranteed." According to Lai Zhaotian, deputy general manager of Ganzhou Rare Earth Mining Company and secretary general of the Luzhou Rare Earth Association, 90% of the local rare earth separation enterprises have been discontinued.
Li Wei, deputy director of the Non-ferrous Metals and the secretary-general of the Ganzhou Tungsten Industry Association, said that the decline in non-ferrous metals has exceeded the range that local companies can afford, while tungsten and rare earths are the local pillar industries. Therefore, the involvement of the local government is inevitable.
On January 20, 2009, the Ganzhou Municipal Government issued the “Notice on Implementation of the Implementation of the Tungsten Rare Earth Product Reserve Work in Ganzhou Cityâ€. From January to December 2009, it collected and stored 1.8 billion yuan of tungsten and rare earth products to support local tungsten. And the rare earth industry.
The municipal government has collected large quantities of non-ferrous metals, and Ganzhou is the first in the country.
Shrinking price and order
"The first half of last year was fine, but after August and September, the price of (rare earth products) fell too fast." Lai Zhaotian said.
“The price of antimony oxide has dropped from 4.2 million/ton to 2.8 million/ton.†Ye Shuangwei, deputy director of Red Gold Rare Earth Office, also said that the price of rare earth products is “far from the cost price of red gold rare earthâ€, “ A production is a loss, and the general rare earth separation companies are afraid to produce.
Tungsten products are also difficult to escape. Fan Dizhen said, "Tungsten metal is affected by the financial crisis is very obvious." In the second half of October 2008 alone, global tungsten prices fell from "8.5 million yuan / ton to 65,000 yuan / ton", and by the end of 2008, tungsten prices fell all the way. Until 53,000 yuan / ton.
With the price plunging, it is a sharp drop in orders.
Although, Zhangyuan Tungsten and Red Gold Rare Earth are already the best companies in the region. However, after October 2008, the red gold rare earth "has basically disappeared from the order, and the export is almost zero." In Fan Dizhen's view, the tungsten industry market is not in the end. "According to previous years' experience, it is now time to enter the peak season of tungsten industry, but orders in March this year have dropped by 40% compared with last year. Orders are not active, and it is difficult to anticipate later."
According to Li Wei, starting from December 1, 2008, all tungsten production enterprises in Ganzhou City have stopped production and implemented “stop production and insured pricesâ€.
According to the national quota, Ganzhou produces 20,000 tons of tungsten per year, accounting for 40% of the national tungsten production. "I stopped production, half of the country's supply was affected, I thought it should have an impact on the price, but after two months of production suspension, the price of tungsten only rose a little, that is 5%-10%."
The government cannot afford it
For the local government, the fall of the tungsten and rare earth industries is unbearable.
According to the data released by the Ganzhou Municipal Government, in 2007, the enterprises above designated size in the tungsten industry realized a total industrial output value of 14.206 billion yuan, and the enterprises above the scale of rare earths realized a total industrial output value of 8 billion yuan, which together accounted for 12.9% of the city's GDP, which is the largest single in the region. industry.
“Tungsten accounts for 50% or 60% of the government's fiscal revenue in Chongyi County (Cangzhou City).†Fan Dizhen also told this reporter.
Moreover, these two industries also provide a large number of jobs for the local area. “Rare earth producers will employ quite a lot of temporary workers. Once they stop production, these temporary workers will lose their jobs, which will bring some pressure to the local government.†Lai Zhaotian told this reporter. At present, in order to avoid the negative impact of the decline in tungsten and rare earth prices, companies are trying to avoid layoffs. The measures taken by Zhangyuan Tungsten Industry are “workers take a breakâ€, while the red gold rare earths are “only inaccessible and strictly controlledâ€.
"They (tungsten and rare earth) are the pillar industries of Chenzhou. They fall, and the economy of Chenzhou City will fall by more than half." Li Wei bluntly told this reporter.
Prior to this, local businesses have started to save themselves. But Fan Diyi said helplessly, "Although we have taken many measures, we certainly can't make up for the loss of tungsten prices. We expect that this year's output value will be lower than last year."
It is precisely to save the tungsten and rare earth industries that the Ganzhou Municipal Government decided to implement the collection and storage. "Either the enterprise or the government, we have conducted many investigations and arguments before the collection and storage." Li Wei said.
18 billion from the bank
The target of this storage is mainly the key deep-processing enterprises of tungsten and rare earth in Ganzhou. The reserve method is that the enterprise pledges the product to the financial institution, and the financial institution issues the loan to the storage enterprise.
Zhangzhou initially planned to store and store 10,000 tons of tungsten and rare earth separation products, and the funds for storage and storage were “about 1 billion yuan for tungsten†and “about 800 million yuan for rare earthsâ€, totaling 1.8 billion yuan. "As for how much to collect depends on the situation, take a step and look at it." In Li Wei's view, the key to purchasing and storing is still in the bank. "We just recommend it to the bank. The bank will review it by itself. Finally, the loan will not be loaned by themselves. Decide."
"It is not accurate to say that the government has taken out 1.8 billion yuan. The government only subsidizes loans, about 10 million." Li Wei explained that 1.8 billion is mainly divided into two parts: discounts and loans.
Among them, the loan is the loan obtained by the storage enterprise to pledged the product to the bank; the discount interest is composed of three parts, the storage enterprise pays 50% of the value-added portion of the value-added tax, and the industrial development fund of Zhangzhou City is 3 million. The county government has a total of 6 million.
Li Wei pointed out that the reason why the deep processing enterprises are mainly because "receiving and storing products are used by these enterprises", "they are used to store and store the prices that are conducive to stable storage and storage." He also said that the local "legitimate" deep processing enterprises will pass the examination and approval. "These deep processing enterprises are relatively large in size, so that they can be stored and stored without problems."
According to Li Wei, 34 of the first batch have been approved, with a loan size of 550 million. Among them, three tungsten enterprises and five rare earth enterprises have obtained bank loans, a total of 81.8 million, and another 26 are being examined and approved by banks. The pledge price given by the bank is about 60%-70% of the price of the product.
In Fan Dizhen's view, compared with the output value of more than 20 billion tungsten and rare earth in Ganzhou City, the storage and storage of 1.8 billion in Zhangzhou City “will not play a direct and decisive roleâ€. The key is to establish confidence. “Let everyone know The government has taken action."
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