Video summary

7610聯友金屬｜115 06 30「東南亞創新資本平台」法說會

Main summary

Key takeaways

Business

Company overview & strategy (Inner Metals / 聯友金屬, David Yen)

  • Role & audience: David Yen (Vice President, Business at Inner Metals) presents at Singapore’s “Southeast Asia Innovation Capital Platform” forum.

  • Business model (2-plant recycling niche)

    • Plant 1 (Fao, Pingtung, Taiwan) Recycles tungsten alloys → leaching to extract tungsten → refine/purify into raw materials.

      • Produces sodium tungstate (upstream intermediate).

        • Plant 2 (near Taipei, Taiwan — “Elan”) Performs cobalt-side solvent extraction → outputs battery-grade cobalt sulfate solution, which can be refined further into:

      • cobalt oxide

      • cobalt carbonate
      • cobalt powder (Cobalt powder is relevant for making tungsten carbide products.)

  • Industrial positioning / roadmap (move downstream)

    • Current: tungsten recycling → sodium tungstate; cobalt sulfate/powder.
    • Next steps (stated plans):
      • Next year: further downstream into ammonium paratungstate (APTs) and tungsten oxide → tungsten powder → tungsten carbide powder.
      • Longer term: cooperate with local Taiwanese semiconductor industry to recycle and produce alloys and sputtering targets (for semicon use).

Why tungsten/cobalt matters (market necessity & supply chain logic)

Tungsten’s attributes (demand drivers)

  • Tungsten is described as “irreplaceable” due to:
    • Highest melting point / hardest metal
    • High abrasion resistance
  • Mentioned application areas:
    • metalworking
    • mining
    • semiconductors
    • other hard-material use cases

Supply concentration risk

  • Tungsten reserves are described as ~50% in China (with the rest in countries such as Spain, UK, Portugal, Australia).
  • Production/refining is also China-dominant, creating geopolitical/export-control risk.

Circular economy pitch (competitive advantage)

  • Inner Metals claims it recycles 100% of materials, avoiding reliance on primary mining feedstock.
  • Claimed benefits vs mining:
    • energy efficiency
    • lower emissions
    • reduced environmental impact

Supply chain structure (process “cascade”)

The talk describes a stepwise chemical conversion chain where you generally cannot skip stages:

  • Sourcing inputs

    • Both mining scrap/primary feed and recycling feed ultimately lead to sodium tungstate.

  • Upstream → downstream cascade (tungsten)

    • Sodium tungstate → ammonium paratungstate (APTs) → tungsten oxides → tungsten powder → tungsten carbide powder

  • Cobalt chain

    • From tungsten alloys → solvent extraction → cobalt sulfate → further refining to cobalt oxide/carbonate/powder
    • Cobalt powder can be used alongside tungsten powders to produce tungsten carbide cutting tools.

Market disruption & implications (tungsten; high-level execution impact)

China export controls (critical minerals)

  • Timeline cited: February 2025 export controls on critical minerals including tungsten.
  • Reported effects:
    • Ammonium paratungstate prices jumped ~10x
    • Tungsten exports down ~31%
    • “Selective” controls affecting tungsten oxides and tungsten carbide powders

Downstream shortage impact example (Japan)

  • Japan reportedly experienced shortages, leading to suspension of tungsten hexafluoride (WF6) production (a key semiconductor gas).
  • Resulting impacts:
    • supply tightness
    • revenue/production cuts for downstream semiconductor equipment/users

Refining capacity vs raw material constraint

  • The speaker claims there is enough refining capacity, but the constraint is raw material feedstock.
  • Hence, recycling becomes more critical.

Concrete demand trends & forecast targets (tungsten)

Current demand & forecast

  • Current annual demand mentioned: ~120,000 tons (speaker’s figure after citing 2016 demand).
  • Forecast target: ~140,000 tons by 2034.

Stated deficit

  • “10,000 ton deficit” (timing not precisely specified; tied to current conditions).

Where growth is expected (use-case list)

  • Photovoltaic board cutting (tungsten wiring)
  • Lithium-ion batteries
  • Wind energy
  • Hydrogen catalysis
  • Aerospace
  • AI/semiconductor tooling
    • includes references to tungsten hexafluoride and tungsten targets
  • Nuclear fusion: potential additional demand of ~10,000 tons/year
  • Defense spending: many countries treat tungsten as a critical mineral and plan strategic reserves/stockpiles

Dual-market approach & competitive positioning (China vs non-China)

  • The industry framing is split into:
    • China market
    • Non-China market
  • Supplier availability & Inner Metals positioning
    • Speaker claims Inner Metals recycles ~a quarter of all tungsten scrap outside China.
    • Mentions a non-China “premium” for tungsten on spot markets after pricing divergence from China.

Cobalt market disruption (high-level)

DRC export constraints

  • Feb 2025: cobalt export ban
  • Oct 2025: ban replaced by quarter export quota
  • Reported impact:
    • ~44–46% less cobalt on the market
    • Equivalent to ~104k–110k metric tons affected (company-side framing)

Link to Inner Metals

  • The talk notes much of Inner Metals’ revenue is from tungsten products, with smaller revenue from conversion processes.

Business model & operating choices (pathways; risk/profit tradeoff)

Inner Metals describes two pathways:

1) Conversion pathway (lower risk)

  • Works with major tungsten tool producers:
    • They send tungsten material to Inner Metals
    • Inner Metals converts it into tungsten raw materials
    • Ships materials back
  • Claim: market-price insulated (less sensitive to price swings).
  • Tradeoff: lower profit margin.

2) Direct sales (higher value, higher exposure)

  • Speaker states direct sales increased significantly.
  • Advantage: Inner Metals can “get cobalt in the alloy for free,” then increase cobalt value via refining/sales as:
    • cobalt powder
    • battery-grade cobalt sulfate solutions

KPIs / financial metrics mentioned (qualitative, quarter-based)

  • The talk provides directional performance rather than absolute numbers:
    • Revenue, profit, and gross margin improved in almost every quarter
    • This year shows a “high jump” in performance
    • Framing comparisons:
      • Revenue reached almost the entire previous year’s level in three quarters
      • Profit and gross margin outperformed the prior year

Company scale & capacity indicators (operational metrics)

  • Listed on: Taiwan Innovation Board
  • Stage: described as “eighth year”
  • Since: listed status described as “since last September”
  • Paid/invested capital (ping capital): US$15.4M
  • Employment: 165 people at the plant

(Recycling capacity was not quantified explicitly beyond directional statements such as “quarter of scrap outside China” and market tonnage deficit/demand.)

Actionable implications & “what to do next” (as stated)

  • Downstream product expansion (explicit plan)
    • After cobalt powder line completion:
      • next year: APTs → tungsten oxide → tungsten powder → tungsten carbide powder
  • Strategic customer/industry partnerships
    • Longer term cooperation with Taiwan semiconductor ecosystem to recycle and produce:
      • alloys
      • sputtering targets
  • Supply resilience via recycling
    • Recycling positioned as the solution to:
      • raw-material shortages
      • export-control-driven dual pricing
      • long lead-time mining development risk (speaker notes mining development can take ~15 years and hundreds of millions up to $1B)

Frameworks / playbooks explicitly used

  • No formal corporate frameworks (e.g., OKRs, SWOT) were stated.
  • Implicitly used:
    • a supply-chain cascade model (stepwise chemical conversion)
    • a dual-path business model:
      • conversion (lower margin, price-insulated)
      • direct sales (higher value, value-add via cobalt refining)

Presenters / sources (as mentioned)

  • Presenter: David Yen, Vice President of Business, Inner Metals (聯友金屬)
  • No external named sources or citations were provided beyond references to:
    • government/export controls
    • broad industry players (e.g., major tungsten tool producers)
    • general mentions such as “US defense department” and a group name where IMC was noted as owned by “Berkshire Hathaway.”

Original video