Tungsten: From Niche Metal to Strategic Chokepoint
Tungsten, a metal crucial for everything from semiconductors to weaponry, is experiencing a dramatic price surge. This isn’t just an industrial issue. it’s a geopolitical one. The price of tungsten has more than doubled this year, with the European APT benchmark from Fastmarkets reaching $2,250 per metric ton unit. Since February of last year, when China placed certain tungsten products on an export control list, prices have risen by a staggering 557%.
China’s Dominance Fuels the Crisis
China’s control over the tungsten market is undeniable. According to the US Geological Survey, China accounted for 79% of the world’s 85,000 tons of mine production last year. This dominance extends to reserves as well, giving Beijing significant influence over production, processing, and export. Western manufacturers have long benefited from affordable Chinese imports, a situation enabled by state support within China.
This reliance on China is now a critical vulnerability. The tightening of export controls has shifted tungsten into the realm of geopolitical conflict between China and the West. Chinese mine production is currently below levels seen a decade ago, attributed to declining ore quality and stricter quotas, exacerbating the supply squeeze.
Defense Demand and Industrial Applications Intensify Scarcity
The current market tightness is compounded by rising demand. Project Blue anticipates a 12% increase in military consumption of tungsten this year, driven by applications in helicopters, combat aircraft, and ammunition. Recent escalations in the Middle East have highlighted the metal-intensive nature of modern warfare.
However, defense isn’t the sole driver. Roughly 60% of US tungsten consumption goes into hardmetal components for cutting, drilling, and wear applications in industries like construction and metalworking. Applications in aerospace alloys, chemicals, and semiconductors further broaden the industrial base, ensuring demand remains robust even outside of geopolitical hotspots.
Recycling and Western Production: A Long-Term Solution?
Some companies are mitigating the impact through recycling and scrap processing. Firms like Ceratizit and Sandvik are leveraging these methods to reduce risk. The USGS also notes that secondary materials help offset pressure on primary supply, but recycling alone won’t resolve the structural shortage.
Increasing Western production is a potential long-term solution, but it won’t be swift. Even with sustained high prices, new production from Spain, Brazil, Australia, or the US would take approximately two years to come online. Almonty Industries is working to address this, having begun production in South Korea in December and developing the first US tungsten mine in a decade. A portion of the South Korean production is earmarked for munitions manufacturing in Pennsylvania.
Pure Tungsten, preparing for a Canadian stock exchange listing in the first half of 2026, aims to begin delivering tungsten concentrate from its Ssangjon mine in South Korea as early as June 2026.
The Illiquid Market Amplifies Price Volatility
Unlike major commodity markets like copper, oil, or gold, tungsten remains a relatively small and illiquid segment, valued at around $16 billion this year – roughly 5% of the copper market. This lack of liquidity, combined with the current supply constraints, makes the market particularly susceptible to price spikes.
FAQ: Tungsten Supply and Pricing
Q: Why is tungsten considered a “critical” material?
A: Tungsten’s unique properties and essential role in both industrial and defense applications, coupled with limited and geographically concentrated supply, make it a critical material for economic and national security.
Q: What is APT?
A: APT stands for Ammonium Paratungstate, a chemical compound used as an intermediate product in the production of tungsten metal and other tungsten compounds. It’s a key benchmark for pricing.
Q: Is there a risk of further price increases?
A: Given the current supply-demand imbalance and geopolitical factors, further price increases are possible. The extent of future increases will depend on China’s export policies, the success of new mining projects, and global economic conditions.
Q: What can manufacturers do to mitigate the risk of tungsten supply disruptions?
A: Diversifying supply sources, investing in recycling programs, and exploring alternative materials are key strategies for mitigating risk.
Did you know? Tungsten has the highest melting point of all metals, making it ideal for high-temperature applications.
Pro Tip: Monitor Fastmarkets’ tungsten price assessments for the latest market data and trends.
Stay informed about critical materials and their impact on global industries. Explore our other articles on supply chain resilience and geopolitical risk.
