Tungsten Price Forecast 2026: Record Highs Driven by China Supply Shock

Tungsten’s Supply Shock: How a Quiet Metal Became One of the Hottest Commodities of 2026

The global tungsten market has entered a turbulent new phase in early 2026, with prices soaring to extraordinary levels amid persistent supply shortages and rapidly rising strategic demand. Long considered a quiet but essential industrial material, tungsten—sometimes referred to as the “war metal” due to its importance in defense manufacturing—has suddenly become a focal point for analysts, policymakers, and investors.

Over the past year, tungsten prices have surged dramatically, climbing several times higher than previous levels. The rally has been fueled by years of underinvestment in mining, declining ore grades at existing operations, strict environmental regulations, and tightening supply from China.

China dominates the global tungsten industry, producing roughly three-quarters of the world’s supply. However, output growth has stagnated, while Beijing has introduced tighter export restrictions on certain tungsten products that can have dual industrial and military uses. By late 2025, exports of key intermediate materials such as ammonium paratungstate (APT) had dropped sharply, in some cases reaching zero shipments.

Prices Break Historical Norms

Market data compiled by commodities pricing agencies shows just how dramatic the shift has been. Ammonium paratungstate, a benchmark tungsten intermediate used to produce powder and carbide materials, averaged roughly $300 per metric tonne unit during 2025.

By early 2026, prices had climbed to approximately $1,775 per metric tonne unit, representing a massive surge in a market that historically moved at a far slower pace.

Tungsten concentrate has experienced even stronger price momentum. Domestic prices in China reached about one million yuan per tonne—equivalent to more than $140,000 at current exchange rates—during March 2026. Some international assessments suggest effective prices approaching $220,000 per tonne as the supply squeeze intensified.

Downstream tungsten products have also seen rapid inflation. Prices for tungsten powder and tungsten carbide components—materials widely used in industrial cutting tools and high-performance machinery—have risen more than 100% in many markets since the start of the year.

A Market “Sleepwalking” Into Crisis

Analysts at BMO Global Commodities Research have warned that the industry has been drifting toward this crisis for years. In a February 2026 research note, analysts George Heppel and Helen Amos argued that the world had effectively “sleepwalked” into a major tungsten shortage.

Their analysis highlighted several long-term structural problems. Global inventories of tungsten have steadily declined, ore grades at major mines have been deteriorating, and very few large new projects have been developed over the past decade.

As a result, BMO expects another supply deficit in 2026. If current trends continue, the firm warns that the market could face an extended period of tight supply and potentially severe shortages.

Why Tungsten Matters

Tungsten plays an unusually important role in modern industry because of its unique physical properties. The metal has exceptional hardness, very high density, and one of the highest melting points of any element. When combined with carbon to form tungsten carbide, it becomes one of the hardest materials used in industrial manufacturing.

These characteristics make tungsten indispensable in many applications. It is widely used in drill bits, cutting tools, mining equipment, and machine parts designed to withstand extreme wear.

In defense and aerospace sectors, tungsten is also critical for producing armor-piercing ammunition, missile components, jet engine parts, and specialized high-temperature alloys. As governments increase defense spending and prioritize domestic manufacturing capabilities, demand for tungsten is expected to grow.

Many countries now classify tungsten as a strategic critical mineral, prompting renewed efforts to diversify supply chains away from heavy reliance on Chinese production.

Limited Paths to Rebalancing

BMO analysts have outlined several potential ways the tungsten market could eventually rebalance, though none appear likely to provide quick relief.

The first possibility is expanded production within China itself. However, declining ore grades and stricter environmental rules limit how quickly new supply can be developed, even with projects such as the large Dahutang deposit under development.

A second possibility involves new mining projects outside China. Several projects are advancing in Europe, North America, and Asia, but permitting, financing, and construction often take many years.

Artisanal mining could increase in response to elevated prices and already contributes roughly six percent of global supply. While such production can offer short-term relief, it is unlikely to generate enough material to rebuild global inventories.

Recycling represents another potential source of supply. Tungsten can be recovered from used cutting tools and industrial scrap, but collection systems remain uneven across markets, particularly in Western economies.

Finally, very high prices could lead to demand destruction or substitution. Yet tungsten’s unique material properties make it extremely difficult to replace in many applications, limiting this adjustment mechanism.

New Projects Gain Strategic Importance

Against this backdrop, new non-Chinese supply projects are attracting heightened attention. South Korea, in particular, is emerging as a potential alternative production hub as governments seek to strengthen critical mineral supply chains among allied nations.

One notable development is the planned restart of the historic Ssangjon tungsten mine by Pure Tungsten Inc., a pre-IPO mining company. The mine, which has been dormant since the 1970s, already benefits from existing infrastructure and an on-site processing facility capable of producing high-grade concentrate.

The company is targeting initial shipments of tungsten concentrate by mid-2026. Early production is expected to reach roughly 1,000 tonnes annually, representing a meaningful portion of current non-Chinese supply, with potential expansion later.

The Ssangjon project sits near another major development, the Sangdong tungsten project operated by Almonty Industries. Together, these projects could form an emerging tungsten production cluster in South Korea.

A Strategic Metal Takes Center Stage

The convergence of geopolitical tensions, defense-driven demand, and fragile supply chains has transformed tungsten from a niche industrial commodity into a centerpiece of global critical-minerals strategies.

Although short-term market adjustments may moderate the most extreme price spikes, analysts widely believe the underlying imbalance between supply and demand will persist.

For manufacturers, governments, and investors alike, the message is becoming increasingly clear: tungsten is no longer a background industrial metal. It has become a strategic resource, and securing reliable supply may prove essential for the industries shaping the next decade of global technology and defense.