China chokes tungsten supply, prices rocket 557% in 12 months
One February morning last year Beijing quietly added a handful of tungsten products to its export-control list. Twelve months later the metal that hardens missiles and drill bits costs $2,250 a metric ton, up 557%, and Pentagon buyers are cold-calling a mine in South Korea begging for any spare tonnage.
The chokepoint is by design, not geology
China mines 79% of the world’s tungsten, but the latest shortage is policy-engineered. Shipments of restricted tungsten shapes—rods, powders, high-purity wires—fell 40% in 2024, according to London consultancy Project Blue. The move weaponized a market worth only $16 billion, a rounding error next to copper, yet critical to every modern army and oil rig.
“In twelve years of trading critical metals I’ve seen nothing this tight since lithium in 2021,” says George Heppel at BMO Capital Markets. “Except lithium had a pipeline. Tungsten doesn’t.”
Stockpiles that once buffered Western toolmakers are gone. Users now bid daily on the European APT reference price, watching lots evaporate before lunch. Drill-bit giant Ceratizit and Sweden’s Sandvik survive only because they vacuum factory floors for scrap and re-melt it—medieval alchemy dressed up as supply-chain resilience.
Pentani panic sets in
Almonty Industries boss Lewis Black took a call last month from U.S. defense logistics officers asking how soon his restart in South Korea could divert cargo to Pennsylvania munition plants. Answer: half the December output is already headed there. “The market, not the Chinese quota, is pricing tungsten for the first time,” Black told me. “No one knows where the ceiling is.”
Washington mothballed its last tungsten mine in 2015; restarting domestic rock-pulling will take at least two years and a conviction that today’s spike outlives the election cycle. Spain, Brazil and Australia hold viable seams, yet financiers remember 2013, when Beijing flooded the market and cratered prices. Capital is cautious; drills stay silent.
Meanwhile, every Houthi drone and Israeli interceptor leans on the same supply chain. Military demand will rise 12% this year, projects Janine Le Roux at Project Blue. “Modern war is a tungsten-eating machine,” Heppel adds. “Drones, counter-drones, depleted-uranium substitutes—all need the densest stable metal we’ve got.”
Substitution won’t save the day
Engineers can swap tungsten for cheaper lead in ballast or radiation shielding, but not in shaped-charge warheads where density equals penetration. Tungsten accounts for pennies in a $50,000 artillery shell; buyers will pay whatever quote arrives.
David Argyle at Arlington Innovation Partners warns the squeeze is temporary—“24 months max”—yet long enough to distort defense budgets and push smaller toolmakers into bankruptcy. “This is what decoupling looks like in real time,” he says. “Slow, expensive and occasionally explosive.”
The West spent a decade lecturing about critical-mineral risk while buying Chinese ore at discount. Now the invoice is due, denominated in a metal most planners still confuse with titanium. Pay up or lose the drill bit—and the war.