"War + semiconductors" strongly boost, tungsten prices soar 557% in one year

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Tungsten, the metal used in weapons manufacturing and semiconductor production, is experiencing an unprecedented price surge.

According to Fastmarkets’ APT European benchmark price data, the current price of tungsten is $2,250 per metric ton unit, up a cumulative 557% from a year ago, far exceeding the performance of mainstream commodities such as gold, copper, and crude oil over the same period. Since the beginning of this year, tungsten prices have more than doubled.

Bloomberg reported on Monday that George Heppel, vice president of commodity research at BMO Capital Markets, said, in his 12 years in commodities, "I have never seen the tungsten market this tight—except for the lithium market in 2021."

The core driving forces behind this rally come from both ends: sharply rising military demand and continuously tightening supply. Middle East conflicts are accelerating stockpile consumption, buyers are scrambling for alternative sources; meanwhile, Western governments are speeding up localization of key mineral supply chains, further reinforcing expectations of tungsten resource scarcity.

Military demand ignites the rally

Tungsten is an ultra-high density metal, widely used in armor-piercing shells, missile components, helicopter and fighter jet ballast due to its armor-piercing capabilities. Project Blue researcher Janine Le Roux said that this year, military-related tungsten consumption is expected to increase by 12%, covering helicopters, fighter jets, and ammunition.

"The war in Iran is a clear reminder of how intensively metals are consumed in 21st-century warfare," said Heppel of BMO. "Thousands of drones, thousands of missiles used for interception—tungsten plays a pivotal role in them."

Le Roux pointed out that ongoing Middle East conflicts are an important driver behind the recent rapid price increases. As users’ inventories run out, the supply-demand imbalance is becoming more pronounced, and upward price pressure continues to build.

Supply gap hard to fill quickly

Tungsten is a highly concentrated niche market. Project Blue estimates that the global tungsten market is worth about $16 billion this year, only around 5% of the copper market. China is the world’s largest tungsten ore exporter; according to the U.S. Geological Survey, global tungsten ore output was about 85,000 metric tons last year, with China accounting for 79%.

Lewis Black, CEO of Almonty Industries, said his company began production at a tungsten mine in Korea last December and is seeking to develop the first U.S. tungsten mine in a decade. He revealed that U.S. authorities approached Almonty last month about immediate supply, with nearly half of the Korean output destined for Pennsylvania for ammunition production.

However, the supply gap cannot be bridged in the short term. David Argyle, co-founder of the Washington key materials investment institution Arlington Innovation Partners, said, expanding mine capacity in Spain, Brazil, Australia, and the United States will take at least about two years—provided investors believe high prices will persist. Argyle believes that the current supply tightness is a transient phenomenon, "at most a 24-month window of market pain."

Price discovery mechanism is being reshaped

The surge in tungsten prices reflects a deeper structural change: the price mechanism is being reshaped. Black pointed out that market prices have long deviated from real supply and demand levels. "We have never been in a situation where the market determines the price," he said, "so we really don’t know where the price will eventually stabilize."

Tungsten isn’t traded on major exchanges, resulting in low transparency and poor liquidity, which amplifies price volatility risk. Argyle warns that given tungsten’s scarcity and low liquidity, prices could climb even higher.

Some large users have begun using recycling to hedge supply risks. Ceratizit, a hard alloy tool manufacturer under Austria’s Plansee Group, said the company mitigates supply pressure by collecting and recycling scrap; Sweden’s Sandvik Group also has tungsten mining and recycling businesses. However, recycling can only partially offset the shortfall in primary supply, and fundamentally easing the structural tightness depends on substantive global expansion of mine capacity.

Risk Warning and DisclaimerThe market has risks and investment needs caution. This article does not constitute individual investment advice and does not consider the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article suit their circumstances. Investment is at your own risk. ```