Analysis of Dingtai Hi-Tech's Strategies to Respond to Rising Tungsten Prices

Based on the collected information, I will systematically analyze Dingtai Hi-Tech’s strategies to maintain cost advantages amid the pressure of rising tungsten prices.

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In 2025, China’s tungsten market experienced a historic rally, with prices of tungsten products doubling across the board:

Product	Price at the Start of the Year	Average Price in October 2025	YTD Increase
65% Wolframite Concentrate	RMB 143,000/ton	RMB 278,200/ton	195.1%
Ammonium Paratungstate (APT)	RMB 210,000/ton	RMB 407,200/ton	~100%
Tungsten Powder	~RMB 320,000/ton	RMB 626.67/kg	~100%
Tungsten Carbide Powder	-	RMB 611.67/kg	~107%

Data Sources: China Tungsten Industry Association, China Tungsten Online [1][2]

This round of tungsten price increases has the following characteristics:

• Supply-Driven
  : The state has strengthened resource protection, and the total mining control quota has been tightened (the first batch of quotas in 2025 was reduced by 6.45% year-on-year)
• Industry Chain Transmission
  : The price increase originated from tungsten concentrate in the upstream, and was transmitted step by step to downstream processing enterprises
• Amplified Price Elasticity
  : Capital inflows and geopolitical factors have intensified price volatility

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Dingtai Hi-Tech’s main products are cutting tools such as

, with its core raw material being (containing tungsten powder and cobalt powder). According to the company’s Hong Kong IPO prospectus, the company expects the average price of tungsten powder to reach in 2025, representing an increase of over 40% compared to RMB 304/kg in 2024 [3].

In the tungsten alloy consumables industry, Dingtai Hi-Tech faces certain cost pressures:

Enterprise	Industry Chain Layout	Raw Material Advantages
Zhongwu Hi-Tech (subsidiary Jinzhou Precision)	Covers the entire industry chain from tungsten mining, smelting to cemented carbide and deep processing	Has obvious raw material cost advantages
Dingtai Hi-Tech	Focuses on cutting tool processing and manufacturing	Relies mainly on external procurement of raw materials

This means that amid rising tungsten powder prices,

[3].

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Facing the pressure of continuously rising tungsten prices, Dingtai Hi-Tech has adopted

:

• Self-Manufacturing Capability for Equipment
  : The company has the ability to independently develop rough and fine grinding machines and slotting machines for PCB drill bits, while competitors in the industry mainly purchase imported Romatic equipment from Switzerland
• Production Efficiency Improvement
  : Through self-developed equipment, the company has achieved industry-leading production expansion speed, with a monthly production expansion rate of
  5-7 million units
  , far exceeding the industry average [4]

Product Type	2024 Proportion	H1 2025 Proportion	Gross Profit Margin Level
Micro-Drills	21%	28%	High
Coated Drill Bits	31%	Continuously Increasing	High
Standard Drill Bits	Declining Trend	-	Low

The proportion of high-end products (micro-drills and coated drill bits) continues to increase, driving

. In the first three quarters of 2025, the company’s gross profit margin reached a record high of , and its net profit margin on sales stood at [4].

• Long-Term Stable Cooperation
  : Maintains long-term and stable cooperative relationships with major suppliers
• Timely Cost Pass-Through
  : Actively communicates and negotiates with downstream customers to reasonably pass on part of the cost pressure

The company clearly stated: “The rise in tungsten prices has a certain direct impact on costs, and the overall impact is currently controllable” [5].

• Global No. 1 Market Share
  : In 2023, the company’s global market share in PCB drill bit sales reached
  26.5%
  , a significant increase from 19% in 2020
• Rapid Production Capacity Expansion
  : As of the end of Q3 2025, monthly production capacity has exceeded
  100 million units/month
  , and is expected to reach 120 million units/month by the end of 2025 and 180 million units/month by the end of 2026
• Cost Dilution via Scale Effects
  : High production capacity utilization brings significant economies of scale, and the company’s gross profit margin in 2025 has increased significantly compared to 2024 [4].

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Indicator	2024	First Three Quarters of 2025	Trend
Gross Profit Margin	~36%	40.62%	↑ Significant Increase
Net Profit Margin on Sales	~14%	19.28%	↑ Approaching Historical High
Net Profit Attributable to Parent Company	RMB 227 million	RMB 282 million	↑ Accelerated Growth

Data Sources: Wind, Soochow Securities Research Institute [4]

This financial performance indicates that

.

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1. Sustained Raw Material Cost Pressure
   : The rise in tungsten prices still has a direct impact on the company’s costs, which requires continuous attention
2. Competitive Disadvantages
   : Compared with enterprises with full industry chain layouts such as Zhongwu Hi-Tech, the company’s raw material cost control capability is relatively weak
3. Technology Substitution Risk
   : Competition from laser drilling technology in the micro-hole field, and the increased technical requirements for drill bits from high-end PCBs used in AI servers

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Amid the pressure of rising tungsten prices, Dingtai Hi-Tech maintains its cost advantages through the following core strategies:

1. Scale Effects
   : Achieves cost dilution by virtue of its global leading market share (26.5%) and rapid production expansion capability
2. Product Upgrading
   : Continuously increases the proportion of high-end products such as micro-drills and coated drill bits to improve gross profit margins
3. Self-Manufactured Equipment
   : Independently develops production equipment to reduce equipment procurement costs and enhance production expansion flexibility
4. Cost Pass-Through
   : Negotiates with downstream customers to reasonably share the pressure of rising raw material costs

The company’s gross profit margin reached a record high of 40.62% in the first three quarters of 2025, proving the effectiveness of its cost control strategies. However, against the backdrop of persistently high tungsten prices, the company needs to continue to focus on upstream raw material cost management and the cost gap with competitors with full industry chain layouts.

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[1] China Tungsten Online - “2025 Overview of China’s Tungsten Product Prices and 2026 Tungsten Market Forecast” (http://news.chinatungsten.com/cn/tungsten-news/tungsten-jewelry-new/20-tungsten-news-cn/tungsten-product-news/174253-tpn-15038.html)

[2] China Tungsten Industry Association - “Complete Chart and Commentary on Tungsten Product Price Trends in October 2025” (https://www.ctia.com.cn/news/123908.html)

[3] Sina Finance - “Dingtai Hi-Tech’s Market Value Exceeds RMB 50 Billion, Assembly Line Worker Wang Xin Built a Global Leader” (https://cj.sina.cn/articles/view/5307552992/13c5ad4e000102nf00)

[4] Soochow Securities Research Institute - In-Depth Research Report: “Dingtai Hi-Tech (301377): Computing Power Construction Drives Surge in PCB Processing Demand” (https://pdf.dfcfw.com/pdf/H3_AP202512011791944813_1.pdf)

[5] JiuFang Investment - “Dingtai Hi-Tech: Rise in Tungsten Prices Has Certain Direct Impact on Costs, Overall Impact Currently Controllable” (https://www.9fzt.com/detail/zzidx_h30590_8_81a9849194e3a1ee00c67963aa338893.html)