Defense contractors aggressively stockpile tungsten, a vital ‘defense mineral’ essential for missiles and advanced weaponry. High demand from arms manufacturers drives prices to record levels, outpacing gains in gold and copper.
Record Price Rally on London Metal Exchange
Europe’s ammonium paratungstate (APT), the primary tungsten derivative, exceeded 2,250 dollars per metric ton unit (MTU)—equivalent to roughly 340 million won—marking a fresh high on the UK Fastmarkets platform. Since February last year, APT prices have climbed 557% over the past year, dwarfing gold’s 47% rise and copper’s 25% increase.
Critical Role in Defense and Tech
Tungsten’s exceptional density makes it indispensable for smartphone vibration motors, precision threading in devices, missile stabilization fins, and other defense applications. Modern arms production and high-tech sectors cannot function without it.
Export Controls Fuel Unexpected Demand
U.S. export restrictions on tungsten inadvertently spurred defense sector purchases. Heppel, analyst at BMO Capital Markets, notes, “Drones and hypersonic missiles lacking semiconductors represent outdated 21st-century warfare; tungsten has become crucially non-substitutable.” He adds that this marks the largest buildup in 12 years, with current corporate hoarding levels unseen before.
Governments and industry leaders push for diversified supply chains, yet tungsten remains heavily reliant on Chinese production.
Expert Warnings on Supply Vulnerabilities
Lu Ru, researcher at London-based Project Blue, attributes the surge to Middle East tensions, stating, “Central bank buying triggered the biggest price jump.” He forecasts at least 12% growth in tungsten consumption for helicopters, fighter jets, tanks, and related military uses this year.
While exposure grows, companies accelerate purchases from China post-export controls. Fastmarkets reports China’s tungsten exports jumped, with annual price gains exceeding 40%.
China’s Market Dominance
U.S. Geological Survey (USGS) data shows China produced 85,000 tons of tungsten in 2024, capturing 79% of global output. Chinese firms hoard aggressively amid rising demand, while Beijing curbs exchange volumes and boosts exports amid fears.
The Trump administration imposed tariffs on Chinese reactor-grade tungsten and seeks Commerce Department probes into long-term risks. However, the U.S. has not commercially mined tungsten domestically in over 10 years.
Stakeholders warn that without new U.S. production bases in the next decade, China will solidify its grip. European firms like Sandvik and Sandvik leverage tungsten byproducts from pyrometals to cut import reliance, though challenges persist.
Global Market Dynamics
The global tungsten market totals about 1.6 billion dollars, with recycling covering just 5% of supply. London Metal Exchange (LME) lacks spot trading, relying on over-the-counter deals between producers and buyers, which exacerbates price volatility amid heavy industry shifts.
Raw material suppliers report surging transactions, but massive demand prompts calls for greater producer engagement to stabilize major deals and curb sharp rises.
