Tungsten Prices Skyrocket Amid Geopolitical Squeeze

Tungsten prices have surged to record highs, more than doubling this year as geopolitical factors tighten global supplies. Beijing's February last year decision to add certain tungsten products to its export control list, amid trade disputes with the US, has significantly impacted availability. This has caused Chinese shipments of restricted products to decrease by approximately 40% last year.

Recent weeks have seen an acceleration in price gains as buyers deplete existing stockpiles and heightened global conflicts sharpen focus on military applications. The super-dense material, crucial for drilling equipment and armor-piercing weaponry, is seeing a 12% increase in military-related consumption this year. Experts note the current market tightness is unlike any seen before, with no immediate pipeline of new projects to alleviate shortages.

The situation underscores Western governments' efforts to diversify critical mineral supply chains away from China. Manufacturers are actively seeking alternative sources, with companies like Almonty Industries Inc. developing new mines. The US has not mined tungsten commercially since 2015, making it heavily reliant on imports, primarily from China, which accounted for 79% of global mine production last year.

While some users mitigate risk through recycling, resolving the structural tightness requires increased output from China and greater global artisanal production. Investors anticipate a period of frustration lasting up to 24 months before supply constraints ease. Despite its strategic importance, tungsten remains a niche market valued at approximately $16 billion this year.