In-depth analysis of the current tungsten steel market

Supply Side: The Prisoner's Dilemma for Holders

Psychological Barriers Breached: When prices surpass the psychological highs held by most, the risk-reward ratio for continuing to hold changes.

Profit-Taking and Hesitation Coexist: Some holders choose to "lock in profits," increasing spot supply and putting downward pressure on prices. However, others may choose to hold back due to high costs or lingering expectations for the future, creating a "structural tension" in supply.

Inconsistent Actions: Holders are not a unified group; their divergent actions lead to chaotic market pricing and a widening "high-low price gap," which is the root cause of the "increased risk of high-low rotation" you mentioned.

Demand Side: Consumers' "Fear of High Prices and Resistance"

Ineffective Price Transmission: Downstream companies such as cemented carbide and special steel cannot promptly pass on the increased raw material costs to end customers, severely squeezing profits.

Strategic Purchasing: Under the influence of fear of high prices, consumers generally adopt a "buy-as-you-go, small-order-quick-out" strategy, refusing to stockpile large quantities. Meanwhile, companies will actively seek alternative materials or optimize processes to reduce tungsten usage.

"Wait and see" mentality: There's a widespread expectation that high prices are unsustainable, leading to a wait-and-see approach before restocking.

Market outcome: "Liquidity freeze"

High prices but low sales: Despite high quotes, actual transactions are scarce, and liquidity quickly dries up.

Reduced capital efficiency: Capital is tied up in inventory, unable to turn over quickly, increasing financial costs and operational pressure for businesses. Traders are particularly affected.