Tungsten crunch can be fixed before prices spike further

Tungsten crunch can be fixed before prices spike further, according to analysts at BMO Capital Markets. However, they warn that global inventories remain critically low. Tungsten prices have surged fivefold over the past year. Tight Chinese supply and years of underinvestment continue to squeeze the market.

BMO analysts George Heppel and Helen Amos argue that the industry ignored structural supply risks. They cite ore grade decline, stricter environmental controls, and weak mining investment. As a result, the market faces another projected deficit in 2026. The analysts expect tightness to persist unless new supply emerges quickly.

Tungsten crunch can be fixed before prices spike further as deficits loom

Tungsten crunch can be fixed before prices spike further, but only through coordinated supply responses. China controls roughly 75% of global tungsten output. Production growth has stalled as ore grades fall and regulations tighten. Meanwhile, Beijing has restricted exports of dual-use tungsten products.

Chinese exports of ammonium paratungstate have dropped sharply. In late 2025, some export volumes fell to zero. According to Fastmarkets, APT prices surged from a long-term average near $300 per tonne to about $1,775 per tonne. This dramatic increase signals deep structural stress in the supply chain.

Supply options remain limited despite rising prices

BMO outlines five mechanisms that could rebalance the tungsten market. However, none offers an immediate solution. Expanded Chinese mine supply appears unlikely in the near term. Projects such as Dahutang may add volumes, but development requires time and capital.

Artisanal mining could respond to higher prices. Yet this segment accounts for only about 6% of global supply. Recycling also offers incremental gains. Western markets show limited expansion potential, while China would need infrastructure investment.

Demand destruction may occur at current price levels. However, substitution remains difficult due to tungsten’s unique hardness and density. Tungsten carbide plays a vital role in mining tools, defence systems, and heavy machinery. Therefore, manufacturers face limited alternatives.

BMO argues that sustained higher prices will eventually incentivize new mine development. The analysts believe only elevated pricing will unlock meaningful greenfield investment. With global reindustrialization and defence spending rising, tungsten demand will likely expand further.

SuperMetalPrice Commentary:

Tungsten crunch can be fixed before prices spike further, but only if miners act decisively. The market now reflects classic critical mineral dynamics. China’s dominance amplifies geopolitical risk and price volatility. Moreover, tight inventories leave little buffer against shocks. If prices remain elevated, new projects outside China could accelerate. Investors and industrial buyers should prepare for prolonged tungsten price strength.