Tungsten Prices Surge Amid Supply Concerns
The price of tungsten has surged fivefold over the past year. The increase is attributed to prolonged underinvestment in mining and tightening exports from China, a dominant supplier of the critical material.
- Tungsten's unique properties, such as its high melting point and extreme hardness, make it indispensable in a variety of sectors, including aerospace, defense, electronics, and mining. It is a critical component in military hardware like armor-piercing ammunition, as well as in the manufacturing of semiconductors, cutting tools, and drilling equipment. - China currently dominates the global tungsten market, accounting for over 80% of the world's primary supply and a significant portion of its refining capacity. This concentration of production gives China considerable influence over global prices and supply availability. - In early 2025, Beijing implemented stricter export controls on several critical minerals, including tungsten, requiring exporters to obtain government permits. This move is seen as a way to safeguard national security and prioritize its domestic industries. - The benchmark price for ammonium paratungstate (APT), a key tungsten product, has seen a significant increase, trading around $415 per metric ton unit (MTU) in early 2025, up from $312/MTU in 2023. Some market analysts predict that prices could surpass $460/MTU in 2026. - The global demand for tungsten is projected to grow, driven by the expanding automotive sector, particularly the production of electric vehicles, as well as growth in the aerospace and electronics industries. - In response to the supply concerns, efforts are underway to diversify the tungsten supply chain. This includes the planned restart of the Hemerdon mine in the United Kingdom, which is one of the world's largest tungsten deposits, and new mining projects in Australia, South Korea, and North America. - The United States, while not a primary importer of Chinese tungsten, is indirectly affected as it relies on allies like Japan and South Korea that process the material for components vital to American manufacturing and defense. In September 2024, the U.S. imposed a 25% tariff on tungsten imports from China to encourage the development of alternative supply chains. - Recycling of tungsten materials is becoming increasingly important as a way to mitigate supply risks and reduce the environmental impact of mining.
