Tungsten, prized for its exceptional hardness and heat resistance, plays a vital role in various industries, including aerospace, defense, and electronics. The recent announcement from China, set to restrict tungsten exports starting December 1, marks a notable pivot in global tungsten dynamics. Traditionally, China has dominated this market, supplying around 80% of the world’s tungsten, but increasing geopolitical tensions and competitive pressures are reshaping the landscape.
The Ministry of Commerce in China has introduced new regulations mandating that exporters of tungsten and other critical metals must apply for licenses. This move is seen as a response to growing demands for non-China sources amid worsening relations between the United States and China. As these tensions escalate, the urgency for countries to secure alternative tungsten supplies intensifies. Notably, the U.S. Defense Department is prohibiting its contractors from sourcing tungsten mined in China by January 1, 2027 — a clear message of the bid for self-sufficiency in a sector crucial for defense manufacturing.
Analysts like Christopher Ecclestone suggest that while China’s restrictions are significant, they may come too late to deeply alter already shifting market dynamics. The actual market reaction in terms of tungsten prices has remained muted, indicating that the concerns over China’s dominance are well understood and anticipated by global markets.
Market Reactions and Future Demand
Despite the turbulence in trade relations, tungsten prices have not significantly surged in response to the Chinese announcement. Ecclestone points out that a more considerable price increase — approximately $50 per metric ton — is necessary to incentivize heightened tungsten production, particularly in the U.S. The ongoing geopolitical climate is applying upward pressure on prices, leading to a renewed interest in domestic mining initiatives.
The U.S. has ramped up tariffs on Chinese tungsten by 25%, which may further foster domestic tungsten production as industries lobby for an increase to 50%. The prospect of a renewed commitment to domestic mining could reshape supply chains over the coming years, making the transition less dependent on Chinese exports.
With China’s export limitations becoming a reality, other countries are vying to capitalize on the anticipated demand. Significant projects, such as the Sangdong mine in South Korea, are moving towards operational readiness. Managed by Almonty Industries, this mine aims to restore production capabilities rapidly, potentially contributing significantly to tungsten supply by 2025. CEO Lewis Black indicated plans to reach 50% of the mine’s capacity, reflecting optimism for a future with more diverse tungsten sources.
Moreover, initiatives in North America are also gathering momentum. Companies like Demesne Resources are actively pursuing acquisitions of existing mines with the expectation of resuming production in the near term. This is underscored by a report from the U.S. Geological Survey highlighting the presence of tungsten deposits across several states, which affirms the United States’ potential to regain a foothold in tungsten production.
Looking Ahead: The Need for Strategic Alliances
As the global tungsten market evolves, both in terms of supply and demand, nations will need to foster strategic alliances to ensure a steady flow of critical resources. Gracelin Baskaran from the Center for Strategic and International Studies emphasizes the concept of “friendshoring,” where countries prioritize securing resources from allied nations rather than relying on adversarial suppliers.
The implications of these shifts are profound for the U.S. and global supply chains. It is clear that a focus on building domestic production capabilities, bolstered by international partnerships, is essential for securing access to tungsten in the future.
The looming changes in tungsten export policies, alongside the emergence of non-Chinese supply routes, signal a significant transformation in the global tungsten market. While the immediate impacts of China’s restrictions may appear muted, they pave the way for potential rebounds in domestic mining initiatives and collaborative international ventures. As the demand for tungsten continues to scale in tandem with technological advancements, the sector will require agile responses to navigate the complex geopolitical landscape effectively. In that context, the future of tungsten looks set to unfold as a blend of competition, collaboration, and cautious growth.