On June 17th, a seemingly cold and impersonal announcement quietly transferred a large amount of money from one group of people's accounts to another person's pocket.
Edith said on the interactive platform that the zirconium oxide powder produced by Tokai of Japan has been halted and it will be difficult to resume production within the year.
It's not about delaying the delivery; it's about shutting down the production line directly and applying the same production process to all orders.
What about the reaction of the A-share market?
Zirconium concepts were all charging upwards with great enthusiasm. Edith pulled two 20CM moves. Oriental Zirconium Industry and Changyu Group formed a joint buy order. Guoqi Materials' stock price soared by +17% during the trading session.
Many people are frantically typing on their keyboards while staring at the涨停 board, but they still don't understand - who exactly is making all this money? Are you sitting at the table eating the meat, or have you been dragged into the kitchen to become the "meat"？
A "chain explosion" ignited from the Chinese rare earth warehouse
First, bring out the underlying trigger of the story.
What level is Tokyo Kako in Japan?
Don't treat it as an ordinary chemical factory. It is the "money-printing machine" for high-end zirconium oxide powder worldwide.
Dental zirconia powder has a global market share of 70% or higher.
MLCC electronic ceramics, solid-state batteries, semiconductor ceramics - all those advanced and sophisticated powders - the core formulas are also in his possession.
Such a leading company that supplies products in all these fields - dentistry, electronics, batteries, and semiconductors - is suddenly shutting down?
The reason is quite straightforward - there is a shortage of "medicine".
This "medicine" is yttrium oxide.
For zirconia powder to be stable, yttrium oxide is an essential stabilizing agent. Now the question is, who decides on the global supply of yttrium oxide? It's China.
China accounts for 80.80% of the global output of yttrium oxide. What about Tokai? It is 100% dependent on imports from China.
The formula is in Japan, but the "food" for it is in China.
As export controls tightened, Tokai found that the yttrium oxide in its warehouse would not last for more than 30 to 45 days.
This is like running a noodle shop. The flour is all in the hands of others. If they tighten the valve, you don't even have the right to knead the dough.
If the inventory runs out, it will lead to a complete shutdown, not just a 10% reduction in production, which is much milder.
What's even more terrifying is that it's not a factory that is sneezing.
Another major Japanese company, Sakai Chemical, has also begun to reduce production by 25% to 30% for its high-end MLCC powders. The high-purity production line has even been shut down completely.
Two major Japanese players both stumbled, and as a result, the global high-end zirconia market has been severely impacted, with a clear and substantial gap opening up.
Dentistry, MLCC, optical fibers, solid-state batteries, and semiconductor ceramics - all were affected by this action.
In the past, it was others who were squeezing our necks. Now it's our turn to firmly grasp the valve at the source.
How can this chain of grain, flour and bread make money?
To figure out who makes the most money, one must first break down this entire supply chain.
You can think of zirconium oxide as a "grain - flour - bread" chain.
The upstream zircon ore, zircon sand, and oxychlorinated zircon - these are the "food sources"
The midstream zirconium oxide powder, or "flour", determines what kind of bread it will be and how expensive it can be sold.
Downstream dental porcelain blocks, electronic ceramics, and solid electrolytes are the "bread" that is actually served on the table.
The East Division has halted production. What was halted was "flour", but globally, teeth don't wait for you, chips don't wait for you, capacitors don't wait for you.
The terminal orders are still coming in, so the downstream production lines need to be switched over.
On the chain, each of the three links presents different types of winners.
Those who have mines, make money by raising prices.
It will be possible to produce flour, relying on technology to replace meat consumption.
Those who are in the terminal business aim to gain a large share of the global market and make a fortune.
You need to figure out which kind of meat you have bought.
Who is sitting at the top of the mine counting the money?
Let's start with the most basic type of minerals and raw materials.
Zircon sand is the "food source" of zirconium oxide. Whoever controls the mines will have the qualification to make money during the price increase cycle.
During this market cycle, the two most prominent names in the upstream sector are Dongfang Zircon and Changyu Group.
Oriental Zirconia takes a complete chain from the mine to the production of zirconium oxychloride, making huge profits along the way.
How fierce is Dongfang Zirconium Industry?
It is the only company in the A-share market that has completed the entire process from overseas zirconium mines to oxygen chlorinated zirconium. The self-sufficiency rate of raw materials is very high.
The suspension of supplies from Dongcao has led to a "disruption" in global high-end supply, but the price transmission is across the entire chain - zircon sand has already risen by approximately 25% this year.
What does having a mine mean?
Your cost is a low point that no one else can ever reach. Your price increase represents pure profit.
The fact is already there.
As soon as the news of the suspension of supplies from Dongcang was released, Dongfang Zirconium Industry raised its prices for the second time.
The price of zirconium oxychloride will increase by 1500 yuan per ton.
The price of zirconium dioxide will increase by 4,500 yuan per ton.
The price of electrically fused zircon will increase by another 2,000 yuan per ton.
They would say "mainly due to the increase in raw material costs", but in their hearts, they know that this is just a way to further boost the profit statement by taking advantage of the current situation.
More importantly, it does not merely sell "coarse grains".
Oriental Zirconium Industry is accelerating its efforts to move towards higher-end products.
The new project for battery-grade high-purity composite zirconium oxide has a designed production capacity of 10,000 tons.
- The first stage of the 5,000-ton production line is currently under construction.
The gross profit margin of high-purity zirconia has reached over 45%.
Standing at the upstream position, there are mines, price hikes, and expectations of a significant increase in the production of high-end powders. This is equivalent to pulling the trigger of three weapons at the same time.
Such companies, once the price increase cycle begins, are very unlikely to fail to make profits.
