The Quiet 9x Metal: Inside the Global Fight for Tungsten

The Rotterdam quote sheet and the ore grade in Jiangxi

In July 2024, a warehouse in Rotterdam listed ammonium paratungstate at $300 per metric ton unit. By May 2026, the same line read $3,000. Two years, nine times. A clerk filed the new sheet. The old one had not yet yellowed.

A metric ton unit means one percentage point of tungsten metal in one metric ton of material. APT is the intermediate product after tungsten concentrate is smelted. It sits between the mine and tungsten powder and hardmetal. Its price moves down the chain from ore to powder to cutting tools. Overseas buyers paying a premium to secure material is itself a signal of tight supply.

At the same time, Chinese tungsten concentrate rose from 138,000 yuan per metric ton in September 2024 to 415,000 yuan in September 2026. APT went from 205,000 to 595,000. Tungsten carbide powder went from 302 yuan per kilogram to 840. Those are large moves. Overseas prices are nearly three times domestic prices. Same periodic table, two parallel markets.

1. At the mine, output did not follow price

Prices rose ninefold. Why did output not follow? That is the first question.

China produces nearly 79% of the world's tungsten ore. Tungsten is a protected mineral in China, like rare earths. The government sets an annual extraction cap and issues quotas in batches. The 2026 full-year quota is about 115,000 metric tons. It did not open up because prices surged. The first batch for 2026 was about 60,000 metric tons, only 2,000 more than the same period a year earlier, a 3.45% increase. A higher quota does not equal higher output.

The average grade of Chinese tungsten ore has fallen from 0.42% in the early 2000s to about 0.28% in recent years. Producing one metric ton of tungsten concentrate requires processing 320 to 420 metric tons of ore. Lower grades, deeper mining, and tighter environmental and safety rules have pushed compliant mines close to their practical limit. In the first half of 2026, Chinese tungsten concentrate output was 53,700 metric tons, down 14.75% year on year. This is not a temporary cut. Compliant and economic capacity grows very slowly.

Overseas projects have entered a new expansion cycle, but each carries the same problems: actual output often falls short of designed capacity, and the output is often locked up by trade flows before it reaches the market.

Kazakhstan's Bakuta tungsten mine began commercial production in April 2025. In the first half of 2026 it produced more than 4,000 metric tons of 65% white tungsten concentrate, with full-year output expected around 9,000 metric tons. All of that output goes back to China for processing and sale. South Korea's Sangdong mine started its concentrator in July 2026, with phase one designed for about 2,300 metric tons of tungsten concentrate a year. A U.S. distributor has already offtaken that capacity, and the output stays in the United States. The UK's Hemerdon mine will produce a bit over 3,000 metric tons a year at full capacity, a small amount against global supply and demand. New overseas mines often take eight to twelve years from exploration to stable output.

Resource countries are also tightening exports. Vietnam's Ministry of Industry and Trade has proposed removing tungsten from the list of minerals allowed for export, with the goal of keeping more processing at home. Zimbabwe has suspended all exports of antimony and tungsten in all forms. The United States has imposed a one-year export ban on tungsten scrap, requiring scrap tungsten and "black mass" to be sold only to U.S. buyers.

Three constraints stack: Chinese quotas, slow overseas expansion, and tighter export rules in resource countries. The tungsten material available for global trade is shrinking, and it is shrinking in the opposite direction from demand growth.

2. Drill bits for AI servers and the Pentagon's inventory

Hardmetal is the largest traditional use of tungsten, taking more than 60% of consumption. In the first half of 2026, revenue in China's cutting tool industry rose 26.4% year on year, and profit doubled. Photovoltaic tungsten wire is replacing carbon steel wire for cutting lines, with penetration expected to pass 80%. That single new use accounts for more than 5% of global demand.

Two growth areas are changing the pricing logic.

AI computing consumes tungsten in a very small component: the drill bit. AI servers need high-density PCBs, with layer counts rising from the low teens to forty. More layers mean deeper drilling and faster wear on drill bits. A conventional PCB drill bit can last more than a thousand holes. The ultra-high aspect-ratio micro drills used for high-end AI server PCBs last only two or three hundred holes. Producing the same number of boards consumes far more tungsten. China Tungsten and Hightech's subsidiary Jinzhou has mass-produced micro drills with a diameter of 0.15 millimeters and a 63x aspect ratio. In the first half, gross margin in its cutting tool business rose 6.57 percentage points year on year, and sales of ultra-high aspect-ratio micro drills grew sharply.

As 3D NAND chips stack beyond 300 layers, tungsten hexafluoride, the key gas for tungsten fill in chip manufacturing, saw its export price rise from $68.75 per kilogram in January 2026 to $231.73 in June, more than tripling. APT rose about 50% over the same period, and tungsten concentrate was even lower than at the start of the year. One product tripled while others barely moved. Tungsten hexafluoride has left the raw material price system and entered a technology-demand pricing system.

Defense demand has the rigidity of inventory rebuilding. Tungsten is the core material in armor-piercing penetrators, with penetration above 60%. From Tomahawk cruise missiles and Patriot air defense systems to bunker-buster bombs, tungsten runs through modern high-end weapons. Global military tungsten purchases rose from 2,200 metric tons in 2024 to 3,000 metric tons in 2025, up 36.4%. The Russia-Ukraine war consumes more than 400 metric tons a month.

Inventory levels matter more. U.S. tungsten metal stock fell from 37,000 metric tons in 1995 to about 6,000 metric tons in 2022, one-sixth of the peak. U.S. defense procurement depends on imports for nearly 100% of its tungsten. The Golden Dome missile defense program alone needs 9,000 metric tons of tungsten. For a country that lists tungsten as a critical mineral, rebuilding the stock is not a question of whether. It is a question of when.

A longer-term variable is moving from the laboratory to the procurement list. The divertor and first wall of a fusion reactor must use all-tungsten components to face plasma at hundreds of millions of degrees. In early 2026, Advanced Technology and Materials signed a major procurement project with the Hefei Energy Research Institute for BEST divertor target plates. China Tungsten and Hightech also signed an agreement to build a joint laboratory for high-performance tungsten materials for fusion. The global fusion tungsten-copper divertor market is expected to grow from about $389 million in 2025 to nearly $5 billion by 2032, a compound annual growth rate above 40%. If fusion reaches engineering scale, tungsten alloy demand will be measured in tens of thousands of metric tons.

3. From buying ore to locking flows

The global contest for tungsten is moving from price competition to institutional competition.

The United States has moved on several fronts. In late August 2026, the Commerce Department imposed a one-year export ban on tungsten scrap, requiring U.S. sellers to sell only to U.S. buyers. Starting January 1, 2027, defense procurement will be barred from buying tungsten and other critical materials from China, Russia, Iran, and North Korea. Less than half a year before the policy takes effect, U.S. domestic tungsten mine output had fallen to zero in 2025, and processing capacity is clearly short.

The UK chose direct funding. The National Wealth Fund plans to put up as much as 71 million pounds to support Tungsten West in restarting the Hemerdon tungsten-tin mine in Devon. At full capacity, the mine will produce more than 3,000 metric tons of tungsten concentrate a year. The government later plans to negotiate offtake agreements with the company.

Resource countries have reacted quickly. Vietnam has proposed removing tungsten from the export list. Zimbabwe has suspended tungsten exports entirely. The common direction is to stop raw ore and lightly processed products from leaving and to force processing to stay domestic.

The locking of trade flows matters more than the price. Sangdong output stays in the United States. Bakuta output goes back to China. Hemerdon offtake agreements are under negotiation. Places that can be mined are not producing more, expansion is slow, and the additional output is allocated by national policy before it reaches the market. The overseas structural deficit, about 20,000 metric tons in 2026 and still about 12,000 metric tons in 2028, will not close quickly through price alone.

China's strategy shows two-way flows. It restricts exports of APT, tungsten oxide, tungsten powder, and other midstream and upstream products. In 2025, tungsten product exports were about 13,000 metric tons of tungsten metal, down 27.5%. At the same time, it has sharply increased tungsten ore imports. In the first half of 2026, cumulative imports were about 7,900 metric tons of tungsten metal, up 75% year on year. Tungsten concentrate imports rose 110.3%, accounting for 96.3% of all tungsten imports. Sources include North Korea, Myanmar, Russia, Kazakhstan, and Rwanda. As of June 2026, China had been a net importer of tungsten for ten consecutive months.

What is restricted for export is processed material. What is imported in large volumes is raw material. Smelting and deep processing stay in China. Resource consumption and environmental impact stay upstream.

4. What the market is pricing

The A-share tungsten sector shows how market perception has changed.

In March 2026, the combined market value of five leading tungsten companies peaked at about 396 billion yuan. In June, as the technology narrative strengthened, it briefly reached 494.9 billion yuan. It has since fallen back to about 315 billion yuan, down 36% from the June high. The stocks have bounced, but they remain far below the earlier peak.

Earnings are moving up. Xiamen Tungsten's tungsten and molybdenum business had first-half revenue of 16.151 billion yuan, up 83.81% year on year, and total profit of 3.296 billion yuan, up 161.28%. China Tungsten and Hightech's first-half net profit rose more than 280%. Prices did not make a new high, but profit did.

That combination, price pullback and profit expansion, usually means valuation is being digested. If tungsten prices hold around 600,000 yuan per metric ton, leading companies' valuations could be absorbed to around 20 times 2027 earnings. Overseas peers trade at clearly higher steady-state valuations. Australia's EQ Resources and others are valued much higher.

In Hong Kong, Jiaxin International Resources has the simplest story. It holds the Bakuta tungsten mine, the world's largest single open-pit tungsten mine. Its theoretical tungsten concentrate output for 2026, 2027, and 2028 is about 8,003 metric tons, 11,927 metric tons, and 13,906 metric tons, respectively, putting it in a rapid ramp-up phase.

In the U.S. market, Almonty Industries is the vehicle Western capital uses to bet on a non-single-source tungsten supply. The company has tungsten assets in South Korea, the United States, Portugal, and Spain. In June 2026 it completed an oversubscribed convertible bond financing with net proceeds of about $773 million. Phase one of the Sangdong mine started production in March 2026. Analysts have initiated coverage with a buy rating and a target price of $26.25. The market is buying a bet on Western tungsten supply independence, not the balance sheet of a mining company. The volatility of that idea is greater than the ore grade.

5. Three signals

Three signals matter for the direction of tungsten prices.

Long-term contract quotes are the most direct price indicator. The tungsten spot market is small. The long-term contracts of leading producers set the price. In August 2026, Zhangyuan Tungsten raised its long-term procurement price twice in a row. Black tungsten concentrate rose from 412,000 yuan per standard metric ton in the first half of the month to 415,000 yuan in the second half. Two consecutive increases matter more than the size of either one.

Scrap tungsten prices are the shortest link in the chain. In March, when tungsten prices overheated, scrap tungsten fell first. In May and July, scrap tungsten stabilized and then rose before primary tungsten concentrate. When the shortest link moves first, real demand in the industry is usually moving first.

Downstream restocking determines how long demand lasts. U.S. defense procurement restrictions take effect in January 2027. Europe and Japan are still building strategic inventories. That institutional demand will not disappear because of short-term price swings.

At a mine in Ganzhou, Jiangxi, a drill pulls a core from several hundred meters underground. The black tungsten in the core is as fine as pepper sprinkled on stone. The grade is lower again. A worker puts it in a bag. The label reads: WO3 0.27%. The bag is carried away. The next shift keeps drilling.