The sharp increase in the tungsten price is the result of the combined effect of multiple factors, as follows:
Supply Side
- Tightening of Mining Quotas: In 2025, the Ministry of Natural Resources set the total tungsten ore mining control target at 58,000 tons, a year – on – year decrease of 4,000 tons, representing a decline of 6.45%. The quotas for major producing areas such as Jiangxi and Hunan were reduced by 8% and 6% respectively. Coupled with the continuous decline in mine grades, the rigid contraction of raw material supply occurred.
- Stricter Environmental Inspections: At the beginning of July, Jiangxi and Hunan launched the second round of central environmental inspections. Many enterprises were required to limit production and carry out rectification due to sub – standard wastewater discharge. The domestic tungsten concentrate operating rate dropped to 35%, with the weekly output decreasing by approximately 200 tons. The market spot inventory dropped to within 15 days, and some manufacturers even experienced a “stock – out” situation.
- Highlighted Resource Scarcity: Globally, China accounts for more than 60% of the tungsten reserves and as high as 84.52% of the production. The resource monopoly advantage has been further strengthened. Overseas increments are difficult to fill the gap in the short term. Although overseas tungsten mining projects in Australia, South Korea, Canada, Vietnam, etc. plan to expand production, they suffer from insufficient investment intensity, long construction periods, and shortcomings in smelting technology, making it difficult to fill the global supply gap in the short term.
Demand Side
- Surge in Military Demand: In July 2025, in the military materials procurement plan of the State Administration of Science, Technology and Industry for National Defense, orders for tungsten products such as cemented carbide cutting tools and armor – piercing projectile cores increased by 42% year – on – year. Leading enterprises such as Xiamen Tungsten Co., Ltd. and China Tungsten High – tech Co., Ltd. are operating at full capacity, and some orders are scheduled until 2026. The Russia – Ukraine war has consumed a large number of tungsten – alloy armor – piercing projectiles. The global military industry chain’s procurement of tungsten increased from 2,200 tons in 2024 to 3,000 tons in 2025. The US “Golden Dome” plan intends to deploy 300 interception systems, with each system requiring 30 tons of tungsten alloy. This alone will consume 9,000 tons of tungsten, far exceeding the global annual output.
- Booming Demand in the New Energy Sector: In the photovoltaic industry, the penetration rate of tungsten – wire diamond wires in silicon – wafer cutting has exceeded 60%. Each GW of photovoltaic modules requires approximately 8 tons of tungsten wire. In the lithium – battery field, lithium tungstate, as a new cathode material, has broad application prospects in solid – state batteries. Enterprises such as CATL and BYD have launched research and development. It is expected that small – batch supply will be achieved in the second half of 2025, with the demand expected to reach 12,000 tons, a year – on – year increase of 300%.
- Recovery of the Traditional Manufacturing Industry: From January to May, the output of metal – cutting machine tools increased by 21.5%, and the output of cemented carbide cutting tools increased by 12% month – on – month in June, reversing the downward trend for two consecutive months. Tungsten’s hardness and high – temperature resistance make it irreplaceable in cutting tools, wear – resistant parts, and aerospace components.
Technological Upgrades
- Leading Enterprises Lead the High – end Extension of the Industrial Chain: Xiamen Tungsten Co., Ltd. has developed “bottleneck – restricting” technologies such as ultra – fine tungsten powder and 3D printing. The digital factory of cemented carbide has achieved full – process intelligence, with the per capita output value increasing by 3 times. The nano – grain cemented carbide developed by China Tungsten High – tech Co., Ltd. has a hardness of hra93.5, and its service life is 5 times that of traditional products, reshaping the market pattern of aero – engine blade processing.
International Market
- Export Controls Lead to Global Supply Tightness: The controls by the Ministry of Commerce led to a year – on – year decrease of 1,879 tons in the export volume of tungsten products from January to May. Japanese companies’ imports of tungsten waste from Germany surged by 294%. The European APT price soared to 440 – 485 US dollars/ton – degree, with a year – on – year increase of more than 35%, creating a strange phenomenon of “inverted” domestic and foreign prices.
- Accelerated Global Resource Allocation: Economies such as the EU and the US are accelerating the layout of alternative tungsten mines, but it is difficult to ease the supply tightness in the short term. The Kamoa – Kakula tungsten mine, the world’s largest tungsten mine jointly developed by the Democratic Republic of the Congo and Chinese – funded enterprises, may ease the global supply pressure if it goes into production in 2026. However, in the short term, prices are still dominated by the supply – demand game.
