Unlike copper or gold, tungsten is not exchange-traded. Most transactions occur through bilateral negotiation with limited public pricing disclosure

Decision Lens

Tungsten’s price surge is not a speculative commodity cycle — it is a structural supply event driven by deliberate Chinese export policy colliding with inelastic military demand. China controls 79% of global production and has simultaneously tightened export controls, reduced mining quotas, and expanded domestic consumption in photovoltaics and semiconductors. The result is a market where spot prices have moved well beyond historical norms and Western producers cannot yet fill the gap. For Mining Operations Directors, the relevant question is not whether to watch this market, but whether your tooling supply chain and wear-parts procurement are already exposed to it.

90-Second Brief

In recent days, tungsten prices surged 557% after China imposed export controls, removing a dominant slice of global supply from accessible markets. Military consumption is compounding the shortage, with defense-related tungsten demand expected to rise 12% in 2026. Western production alternatives are in early ramp or still in development, with credible timelines pointing to a two-year window before new supply meaningfully enters the market. Until then, buyers outside China face a structurally constrained market with limited spot alternatives.

What’s Actually Happening

China’s export restrictions on tungsten are not a temporary trade measure — they reflect a deliberate strategy to control a metal for which no Western-scale production currently exists. Chinese exports of restricted tungsten products dropped 40% last year, according to Project Blue, and domestic consumption within China has grown across photovoltaics and semiconductor manufacturing, further reducing exportable volumes.

On the demand side, military applications — missile components, dense penetrators, artillery — are consuming stockpiles faster than they can be replenished. Tungsten’s unique combination of extreme density and the highest melting point of any pure element makes substitution technically impractical in these applications.

The pricing mechanism is also unusual. Unlike copper or gold, tungsten is not exchange-traded. Most transactions occur through bilateral negotiation with limited public pricing disclosure. The APT European benchmark provides a reference point, but thin trading volumes mean price discovery lags physical market conditions. This opacity amplifies volatility and makes forward procurement planning harder than for conventional base metals.

The U.S. has not operated a commercial tungsten mine since 2015. Western governments are now actively pushing to develop domestic supply chains, but experts consistently flag a two-year minimum before new projects reach production scale.

Why It Matters for Mining Operations Directors?

Tungsten’s most direct relevance to mine site operations is in wear-critical components: drill bits, cutting inserts, rock-breaking tools, and hard-facing materials in crushing and grinding circuits. Tungsten carbide dominates these applications precisely because nothing else survives the abrasive conditions at comparable cost-efficiency.

If tungsten carbide component pricing tracks spot APT moves — even with a lag — the cost per metre drilled and cost per tonne processed will increase. This hits operations running high drill metreage (underground development, production drilling in hard rock), as well as processing plants managing high-abrasion ores. Procurement teams that locked in fixed-price supply agreements before the price surge are partially insulated; those on variable or spot-indexed supply are already absorbing the increase.

Beyond direct tooling cost, the deeper operational risk is availability. When prices spike this sharply, suppliers prioritize their highest-volume, longest-contract customers. Smaller sites, remote operations, or those without strategic supply relationships may face allocation constraints — not just higher prices. The correct response is not to speculate on metal prices, but to audit current tungsten carbide exposure across all tooling and identify contract structures that guarantee supply continuity through 2026 and into 2027.

The Forward View

Almonty Industries’ Sangdong mine in South Korea is the most advanced Western alternative, with the company’s CEO projecting capacity of over 460,000 MTUs of tungsten concentrate annually by 2027 — potentially covering 40% of ex-China global demand. Phase 2 expansion is planned for the following year. If that ramp proceeds on schedule, it represents the first meaningful structural relief to supply tightness.

However, Almonty’s 2025 revenues fell short of analyst forecasts, attributed to underperformance at its Panasqueira mine in Portugal. Sangdong’s Phase 1 commissioning is therefore the pivotal near-term variable. U.S.-based production from Almonty’s Browns Lake project in Montana is targeted for late 2026 at initial capacity of 140,000 tpa — but that remains subject to brownfield restart execution risk.

In Europe, Allied Critical Metals is drilling at Borralha, Portugal, with construction targeted around 2027. Fireweed Metals in northern Canada and American Tungsten in Idaho are earlier-stage. The collective implication: meaningful Western supply relief is a 2027-and-beyond story. Operations directors planning capital procurement cycles through 2026 should assume the supply constraint persists for the duration of that window.

What We’re Uncertain About?

  • Whether tungsten carbide tooling prices will fully track spot APT movements, and on what lag. This is a downstream pricing pass-through question that depends on supplier contracts and component manufacturing margins. Resolving it requires direct conversation with your primary tooling suppliers about their raw material cost exposure and pricing adjustment mechanisms.

  • Whether Sangdong’s Phase 1 ramp proceeds on schedule through 2026. Almonty missed 2025 revenue targets at Panasqueira. Sangdong is a materially larger operation commissioning from a long-dormant state. The production timeline underpinning analyst forecasts carries execution risk. Monitoring ALM’s quarterly commissioning updates is the clearest resolution path.

  • Whether Chinese export restrictions will ease, hold, or tighten further. Geopolitical context suggests the restrictions are strategic rather than market-driven. The trajectory depends on U.S.-China trade relations and military developments that are genuinely unpredictable. Treat this as a durable constraint for planning purposes.

  • How broadly the U.S. Department of Defense’s 2027 Chinese-sourced materials exclusion will affect non-defense buyers. If DoD procurement shifts aggressively toward domestic and allied-nation supply, it could crowd out commercial and mining industry access to the same limited Western production. The resolution timeline maps to procurement policy announcements from DoD.

One Question to Bring to Your Team

What percentage of our current tungsten carbide tooling spend is covered by fixed-price supply agreements that extend past Q4 2026, and which critical wear-components carry no contracted supply protection if our primary vendor allocates to larger customers first?

Sources

  • Streetwisereports — Which Companies Could Benefit From Price Explosion for So-Called ‘War Metal’? (Link)

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