Munitions Metal Tungsten Outshines Gold, Copper in 557% Rally

The tungsten mine, operated by Trinity Metals Group, in northwest of Kigali, Rwanda, on Friday, May 23, 2025. Tungsten prices will likely rise as supply is declining after China set export control and tightened mining quota on the metal, Shanghai Securities News reports, citing industry experts. Photographer: Kang-Chun Cheng/Bloomberg Photo by Kang-Chun Cheng /Bloomberg

Article content

(Bloomberg) — A metal used in weapons and semiconductors is finding itself the subject of geopolitical tensions as Chinese export limits and rising military demand squeeze supplies, sending prices to record highs.

Article content

Tungsten, a super-dense material that’s a key component in drilling equipment and armor-piercing weaponry, has more than doubled in value this year, according to the APT European benchmark from Fastmarkets. At $2,250 per metric ton unit, prices have risen 557% since Beijing added certain tungsten products to its export control list in February last year amid a trade dispute with the US.

Article content

Article content

Article content

Gains have accelerated in recent weeks as buyers exhaust stockpiles and conflict in the Middle East sharpens focus on military demand.

Article content

Article content

“In my 12 years working across the commodity space and dealing with a lot of weird and wonderful metals, I have never seen a market as tight as tungsten is right now — aside from maybe lithium in 2021,” BMO Capital Markets analyst George Heppel said. “This isn’t like lithium, where there was a huge pipeline of projects that could come online.”

Article content

Manufacturers have jostled for alternative supplies since China, which dominates global production, tightened exports. Chinese shipments of restricted tungsten products were down about 40% last year, according to Project Blue, a London-based research and consulting firm specializing in critical minerals and energy-transition supply chains.

Article content

The squeeze underscores why Western governments are attempting to reduce reliance on China for critical minerals — a leverage point Beijing has used in trade and technology disputes.

Article content

“The industrial base is desperate for material,” said Almonty Industries Inc. Chief Executive Officer Lewis Black, whose firm began production at a mine in South Korea in December and is seeking to develop the first US tungsten mine in a decade.

Article content

Article content

Black said US authorities contacted Almonty last month regarding immediate material availability. Almost half of its South Korean output is earmarked for Pennsylvania, where it’s used in munitions.

Article content

Tungsten’s rally gathered pace as users drew down inventories and export restrictions allowed prices — previously restrained by Chinese subsidies — to better reflect supply and demand, Black said.

Article content

“We’ve never been in a situation where the market is determining the price,” he added. “So we don’t really know where it’s going to settle.”

Article content

Despite its strategic importance, tungsten remains a niche market. Project Blue estimates its value at about $16 billion this year — roughly 5% of the copper market at current prices. It is also far more opaque and illiquid, as it does not trade on major exchanges. Even so, its gains over the past year have far outpaced those of commodities such as gold and oil.

Article content

“The current conflict in the Middle East is a contributing factor to the most recent price surge,” said Janine Le Roux, a researcher at Project Blue.

Article content

Military-related tungsten consumption — including use in helicopters, fighter jets and ammunition — is set to increase 12% this year, she said.