SDIC Securities: Tungsten prices continue to rise, focus on opportunities for leading tool companies to rise in volume and price

The Zhitong Finance App learned that SDIC Securities released a research report saying that tungsten prices have risen rapidly since this year, and in the long run, tight supply will support the operation of high tungsten prices. The inflection point of leading tool operations in 2025Q3 has arrived, and the performance-side revenue and profits of industry companies are rising. Considering that there is a time lag in tool surplus prices brought about by rising tungsten prices, the advantage of leading companies with low inventory prices will be reflected in the fourth quarter and beyond. The bank is optimistic about the flexibility of domestic tool performance.

The main views of SDIC Securities are as follows:

Since this year, tungsten prices have risen rapidly. In the long run, tight supply will support the high operation of tungsten prices

Ferro tungsten is a key raw material for tools. Since this year, the market price of tungsten products has continued to rise. According to Chinatungsten Online, as of December 10, 2025, the prices of black tungsten concentrate, APT, and tungsten carbide powder have increased by 157%, 158%, and 180%, respectively, compared to the beginning of the year. 80% of the world's tungsten ore production is concentrated in China. China has long regarded tungsten metal as a strategic resource. In recent years, it has continued to increase the control of tungsten ore mining resources. Under the influence of continuous supply contraction and strong emerging demand from photovoltaics, military industry, and PCB drills, tungsten prices are expected to maintain a high operating trend in the next few years.

Prices for domestic knives continued to rise, and foreign price adjustments at the end of the year further increased domestic price space

The price mechanism of domestic tool companies is relatively flexible, and the price of tools is highly correlated with the price of raw materials. In May, September, and November of this year, the industry experienced a wave of price increases. Recently, European, American, Japanese, and South Korean brands such as Yamataka, Kenner, Kyocera, and Sumitomo have successively issued price increase letters to raise the price system from December 2025 to February 2026. Considering that foreign tool customers are positioned as middle and high-end, the bank believes that this round of price increases by most foreign brands will, on the one hand, strengthen market education, which will help tool companies and dealers to get better prices for end customers; on the other hand, the cost performance advantages of domestic products will become more prominent after foreign price increases, which will also help domestic brands continue to rise.

Small and medium-sized tool companies cut production and stopped work due to financial pressure, leading market share is expected to increase

As the price of tungsten continues to rise, some raw material suppliers have achieved their annual business targets and took the initiative to slow down the pace of shipments at the end of the year. Some tool leaders have strong financial strength and have reserved sufficient raw material inventories in advance during this round of price increases, further amplifying the cost advantage. Small and medium-sized tool companies are under high financial pressure to replenish their raw material stocks, and production cuts have even stopped. More market demand is expected to gather for leading brands. Take Okeyi as an example. According to its investor exchange records, with the gradual recovery of downstream demand and the demand for channel inventory replenishment, order volume and product unit prices increased sequentially in October-November, and shipments also showed a sharp rise in volume and price.

Risk warning: Prices of raw materials fluctuate greatly; recovery in the manufacturing industry slows down; industry competition intensifies, etc.