December 07, 2023
European tungsten industry in a slump, leading companies going against the trend
European tungsten industry in a slump, leading companies going against the trend. Date: December 7, 2023. Source: Zhongzheng Commodity Research Institute. After 2021, despite the economy being lower than pre-crisis levels, the demand for tungsten in the European market began to recover. Starting in 2022, it reached a stable level, mainly due to the rapid growth in industries such as petroleum and natural gas, including catalysts, with tungsten demand increasing by 2% compared to 2021. In 2023, the European economy continued to remain sluggish. As the tungsten market was operating at relatively high levels and with a decrease in orders for tungsten companies, the market entered a destocking phase (during the COVID-19 pandemic and the start of the Ukraine war, high inventory levels were maintained due to concerns about supply interruptions). This will lead to a 20% decrease in tungsten demand. It is expected that the weak economic atmosphere in the European Union will continue in 2024, and the impact of tight monetary policies will continue to suppress economic activity. In the long run, more attention and resources will be tilted towards areas such as semiconductors, pharmaceuticals, energy production, infrastructure, and defense. In terms of new technologies, breakthroughs and developments are expected in the use of tungsten in areas such as battery storage, brake disc coatings, and fusion technology. This will have a positive impact on the growth of tungsten consumption, to some extent compensating for the decline in tungsten demand in traditional sectors. Despite the pessimistic atmosphere and weak demand in the European tungsten market, leading companies are experiencing growth against the trend. Sandvik's profit margin in the third quarter of 2023 was 20.1%, continuing to maintain strong growth. Key data for the third quarter: order volume of 28.927 billion Swedish kronor, a decrease of 4%; quarterly revenue of 31.476 billion Swedish kronor, an increase of 4%; adjusted earnings before interest, taxes, depreciation, and amortization (EBITA) of 6.312 billion Swedish kronor, adjusted EBITA profit margin of 20.1%; adjusted pre-tax profit of 5.815 billion Swedish kronor, adjusted pre-tax profit margin of 18.5%; adjusted pre-tax profit of 5.056 billion Swedish kronor, current profit of 3.9 billion Swedish kronor, and adjusted profit of 3.949 billion Swedish kronor.
