Amid escalating geopolitical tensions between the United States and China, tungsten—a strategic industrial metal widely used in defense-grade weaponry and high-end semiconductors—has seen its price soar to unprecedented levels. China's stringent export restrictions, combined with rising military demand, have significantly constrained global supply, propelling this high-density material, often referred to as "industry's teeth," to record highs.
According to Fastmarkets' European APT (ammonium paratungstate) benchmark price, tungsten has more than doubled in value this year, reaching an all-time high of approximately $2,250 per metric ton unit. Since China imposed export controls on certain tungsten products in February of last year amid ongoing trade disputes with the U.S., prices have surged by an astonishing 557%.
Recent weeks have witnessed an acceleration in this upward trend, as buyers deplete their inventories and renewed conflict in the Middle East drives commodity traders and governments worldwide to secure independent supplies of critical military metals. Tungsten has evolved from a conventional industrial metal into a dual-use strategic material embedded in defense, semiconductor, and advanced manufacturing sectors.
When China included tungsten and other key metals in its export control list in February 2025, it effectively elevated the metal from a trade commodity to a tool of geopolitical strategy. Concurrently, the U.S. has intensified efforts to decouple its critical mineral supply chains from China, making tungsten a focal point in major-power competition. The 557% price surge since China's export restrictions reflects the market's reassessment of tungsten's strategic scarcity.
Modern warfare, involving extensive use of drones, missiles, and countermeasure systems, has further amplified tungsten's strategic importance. Unlike gold, which benefits from safe-haven demand, or copper, which relies on economic recovery prospects, tungsten is being driven by military consumption, critical manufacturing needs, and policy confrontations. Compounding these factors, the tungsten market is relatively small, illiquid, and opaque, resulting in price volatility that far exceeds that of copper, crude oil, or even gold—which rose 70% in 2025.
“In my 12 years in commodities, I’ve rarely seen a metal market as tight as tungsten is today—apart from lithium in 2021,” noted George Heppel, an analyst at BMO Capital Markets. “But unlike lithium, there aren’t large-scale projects ready to come online for this defense-critical metal.”
Since China—the world’s dominant tungsten producer—tightened exports, Western manufacturers have scrambled for alternative supplies. Project Blue, a London-based research firm specializing in critical minerals and energy transition supply chains, reported that China’s exports of restricted tungsten products fell by roughly 40% last year. This severe supply squeeze underscores why Western governments are seeking to reduce their reliance on Chinese critical minerals, particularly those vital to defense—a pressure point Beijing has leveraged in ongoing trade and tech disputes.
“The global industrial base urgently needs this material,” said Lewis Black, CEO of Almonty Industries Inc., which began production at a mine in South Korea in December and is actively pursuing the development of the first major U.S. tungsten mine in over a decade. Black revealed that the U.S. Department of Defense contacted Almonty last month to inquire about immediately available supplies. Nearly half of the company’s Korean output is reserved for defense-related ammunition production in Pennsylvania.
According to Black, as major global clients work through their inventories and export controls allow prices to reflect true supply-demand dynamics—previously suppressed by Asian subsidies—tungsten’s rally has gained momentum. “We’ve never been in a situation where the market alone sets the price,” he added. “So we don’t really know where it will eventually stabilize.”
Tungsten’s dramatic price increase is not driven by speculation but by an extremely concentrated supply structure further tightened by policy. China not only holds the world’s largest tungsten reserves but also accounted for 79% of global mine production last year. Media reports indicate that China’s exports of restricted tungsten products fell nearly 40% year-on-year, while its mining quota for 2025 was cut by 6.5%. This signals not merely “tight supply” but an active contraction from the world’s most critical source.
For Western buyers, China’s restrictions on export licenses, quotas, and eligible exporters have shifted tungsten prices from artificially suppressed levels to those reflecting genuine scarcity. Moreover, as the U.S. government elevates tungsten’s strategic importance—bringing it closer to that of rare earths—demand is being amplified by heightened military conflicts, creating a perfect storm of supply constraints and defense-driven consumption.
Tungsten’s exceptional properties—including a melting point of 3,422°C, density of 19.3 g/cm³, and extreme hardness—make it indispensable in advanced military applications. It is the material of choice for armor-piercing penetrators, replacing depleted uranium without radioactive hazards, and is critical in aerospace components, rocket nozzles, and high-temperature industrial tools. Broad industrial demand—such as in cemented carbide cutting tools, which account for about 60% of U.S. tungsten consumption—further magnifies supply vulnerabilities.
Although strategically vital, tungsten remains a niche market. Project Blue estimates its current market size at around $16 billion—just 5% of the copper market at current prices. It is not traded on major exchanges like the LME, contributing to its opacity and illiquidity. Yet, over the past year, its price increase has far outpaced those of gold and oil.
“The ongoing conflict in the Middle East is one factor driving the recent price spike,” said Janine Le Roux, a senior analyst at Project Blue. She projects that military-related tungsten consumption—including use in helicopters, fighter jets, and ammunition—will grow by at least 12% this year.
Like many critical minerals, China has dominated tungsten production for decades. However, unlike others, it also controls the largest reserves. The U.S. Geological Survey reports that of the 85,000 metric tons of tungsten produced globally last year, 79% came from China. The U.S., by contrast, has not commercially mined tungsten since 2015, leaving American and European defense manufacturers increasingly reliant on Chinese imports.
David Argyle, co-founder of Arlington Innovation Partners, a Washington-based firm focused on critical materials investment, suggested that China’s recent export controls were less about preserving domestic supply and more a “geopolitical jab.”
There are no quick fixes for the supply shortfall. While Spain, Brazil, Australia, and the U.S. could potentially expand production, new Western supplies would take at least two years to come online—assuming investors believe high prices will persist. As U.S.-China competition over critical minerals intensifies, tungsten is being repriced as an irreplaceable strategic bottleneck in the defense-industrial chain.
Some major consumers have mitigated supply risks through recycling. Ceratizit, a tool manufacturer and subsidiary of Austria’s Plansee Group, relies on scrap recycling to reduce dependency on primary supply. Similarly, Sweden’s Sandvik Group operates its own tungsten mining and recycling units. According to the USGS, recycled materials help offset constraints in primary supply.
Still, resolving the structural supply deficit will require not only restarting idled Western mines but also increased Chinese output and more small-scale mining globally. While high prices may encourage substitution with cheaper materials like lead in some applications, tungsten often constitutes a small portion of final product costs, and alternatives are limited.
Argyle warned that prices could spike further given the market’s illiquidity and scarcity, though he views the current squeeze as temporary. “This frustrating situation may last up to 24 months,” he noted.
Although defense applications draw significant attention, most tungsten demand comes from industrial sectors. Approximately 60% of U.S. consumption goes into carbide components used in construction and metalworking. Tungsten is also vital in aerospace alloys, high-end chemicals, and—crucially for the semiconductor industry—as a sputtering target material that influences chip performance and yield.
Rising defense spending in Western countries, particularly in Europe following former President Trump’s calls for rearmament, has exacerbated supply tensions. Germany, for instance, plans to increase defense spending from about 2.4% of GDP to 3.5% by 2029.
“The ongoing conflict between the U.S./Israel and Iran is a stark reminder of how much tungsten is consumed in 21st-century warfare,” said BMO’s Heppel. “Hundreds of thousands of drones, precision missiles, and interception systems—tungsten plays a crucial role in all of them.”
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