With the strong support of "War + Semiconductors", tungsten prices soared 557% in one year

# Zhao Ying

Source: Wall Street Insights

Tungsten prices have skyrocketed **557%** in a year, hitting an extreme market trend “never seen before” in 12 years. Middle East conflicts are depleting inventories, while massive consumption in drones and missiles is driving a projected **12% increase** in military demand this year. Experts warn: it will take at least two years to fill the supply gap, and **no one knows where the price ceiling lies**.

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

According to Fastmarkets’ European benchmark price for APT, tungsten is currently quoted at **$2,250 per metric ton unit**, representing a cumulative surge of 557% from a year ago — far outperforming major commodities such as gold, copper and crude oil over the same period. Since the start of this year, tungsten prices have more than doubled.

In a report on Monday, Bloomberg cited George Heppel, Vice President of Commodities Research at BMO Capital Markets, who said that in his 12-year career in commodities, he had **“never seen the tungsten market this tight — except for the lithium market in 2021”**.

The core drivers behind this rally are twofold:

a sharp acceleration in **military demand** and persistent **supply tightness**.

The Middle East conflict is rapidly draining inventories, with buyers scrambling for alternative sources. At the same time, Western governments are accelerating the localization of critical mineral supply chains, further reinforcing market expectations of tungsten scarcity.

## Military demand ignites the rally

Tungsten is an ultra‑high‑density metal valued for its armor‑piercing properties, widely used in armor‑piercing projectiles, missile components, helicopter and fighter jet ballast, and other military equipment.

Janine Le Roux, a researcher at Project Blue, said **military‑related tungsten consumption is expected to rise 12%** this year across helicopters, fighter jets, ammunition and other sectors.

“The Iran war has been a stark reminder of how metal‑intensive 21st‑century warfare is,” said BMO’s Heppel.

“Thousands upon thousands of drones, and thousands of missiles used to intercept them — tungsten plays a decisive role.”

Le Roux noted that the ongoing conflict in the Middle East has been a major catalyst for the recent acceleration in prices. As user inventories run dry, the market imbalance has intensified, building persistent upward pressure on prices.

## Supply gap cannot be closed quickly

Tungsten is a highly concentrated niche market. Project Blue estimates the global tungsten market will be worth around **$16 billion** this year, roughly only 5% the size of the copper market.

China is the world’s largest tungsten exporter. According to the U.S. Geological Survey, global tungsten mine production was about **85,000 metric tons** last year, with China accounting for **79%**.

Lewis Black, CEO of Almonty Industries, said his company started production at a tungsten mine in South Korea in December and is seeking to develop the first new U.S. tungsten mine in a decade.

He revealed that U.S. authorities approached Almonty last month about immediate supply, and nearly half of the company’s South Korean output will be shipped to Pennsylvania for ammunition production.

However, the supply shortfall cannot be resolved in the short term.

David Argyle, co‑founder of Arlington Innovation Partners, a Washington‑based critical materials investment firm, said expanding mine capacity in Spain, Brazil, Australia and the U.S. will take **about two years** to materialize — assuming investors believe high prices are sustainable.

Argyle views the current tightness as temporary:

“There’s a window of at most 24 months where the market is going to be suffering.”

## A reshaped price discovery mechanism

The explosive rally in tungsten also reflects a deeper structural shift: the **price mechanism is being rewritten**.

Black noted that in the past, market prices were long disconnected from real supply and demand.

“We’ve never been in a situation where the market sets the price,” he said.

“So we really don’t know where prices will eventually stabilize.”

Tungsten is not listed on major exchanges, resulting in low transparency and poor liquidity, which further amplifies price volatility.

Argyle warned that given the market’s scarcity and low liquidity, prices could surge even higher.

Some large users have turned to recycling to hedge supply risks.

Ceratizit, a hard‑metal toolmaker owned by Austria’s Plansee Group, said it eases supply pressure by collecting and recycling scrap.

Swedish engineering group Sandvik also runs tungsten mining and recycling operations.

However, scrap recycling can only partially offset immediate supply gaps. A fundamental easing of structural tightness still requires substantial expansion of mining capacity worldwide.

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