Tungsten Price Forecast 2026: Surge Amid Iran Conflict
Tungsten's Explosive Rally: The "War Metal" Surges 557% as Iran Conflict Fuels Military Demand
In the shadow of the ongoing U.S.-Israeli conflict with Iran that erupted on February 28, 2026, a crucial mineral has stolen the spotlight from headline commodities like oil and gold. Tungsten, known as the "war metal" for its critical role in modern weaponry, has surged 557% since February 2025, outpacing gains in gold, silver, copper, and even crude amid the ongoing energy crisis. European benchmark prices for ammonium paratungstate (APT)—a key intermediate—have climbed above $2,250 per metric ton unit (mtu), reaching record highs around $2,100–$2,400/mtu duty-free in Rotterdam. In China, domestic tungsten powder trades near RMB 2,380/kg (approximately $345/kg), up over 120% year-to-date, while concentrate prices exceed RMB 1,030,000/ton.
This remarkable surge results from a combination of chronic supply constraints, Beijing's export restrictions, declining ore quality in China's dominant production, and surging demand from defense procurement accentuated by the Middle East conflict. Tungsten's exceptional hardness, density, and heat resistance are indispensable in armor-piercing projectiles, missile components, artillery shells, helicopter and fighter jet counterweights, grenades, and bullet-proof vehicles. Project Blue, a leading critical minerals intelligence firm, forecasts military tungsten consumption to rise 12% in 2026, driven by massive needs for drones, precision missiles, and interception systems in the Iran conflict zone. Analysts underline the conflict's effect on stockpiling, rapidly draining inventories and pushing buyers to secure material desperately.
China continues to dominate the market. According to the U.S. Geological Survey's latest data, the country produced 67,000 tonnes of tungsten in 2025 out of a global total of 85,000 tonnes—nearly 79%. Vietnam trailed far behind with 3,000 tonnes. Beijing's February 2025 decision to add certain tungsten products to its export control list—initially a response to increasing U.S. trade tensions—shifted the regime from quotas to case-by-case licensing, reducing restricted shipments by about 40% last year. Combined with deteriorating ore grades and lower mine output compared to a decade ago, this has led to a structural supply deficit without a quick resolution.
The United States, Canada, and the European Union have long classified tungsten as a critical mineral for its strategic importance in defense, aerospace, electronics, and high-temperature applications. However, the U.S. has not produced domestic tungsten since 2015 when the Cantung mine on the Yukon-Northwest Territories border shut down following North American Tungsten's bankruptcy. Western nations now feel urgent pressure to diversify from China, yet establishing new production takes years.
Enter Almonty Industries (NASDAQ: ALM), a Toronto-based company making headlines in the crisis. On March 16, 2026, the company announced the completion of Phase 1 commissioning at its Sangdong Tungsten Mine in South Korea—a historic site dormant for over 30 years since the Japanese occupation era, now resuming production. The new processing plant handles about 640,000 tonnes of ore annually, initially yielding roughly 2,300 tonnes of tungsten concentrate. A Phase 2 expansion slated for 2027 will double output to approximately 4,600 tonnes per year, potentially covering 40% of non-Chinese global demand. U.S. authorities contacted Almonty last month about immediate material availability, with nearly half of Sangdong's output destined for Pennsylvania munitions facilities. The company is also working on restarting a tungsten project in Montana.
Other efforts, including projects in Kazakhstan and emerging suppliers like Pure Tungsten's Ssangjon mine in South Korea (targeting first shipments by June 2026), offer hope but fall short of immediate needs. Analysts highlight that significant Western supply increases might take two years or more—insufficient for current procurement timelines as defense contractors rush to meet accelerated orders.
The price rally has broader implications. For defense-heavy economies like the U.S. and its allies, tungsten's surge highlights vulnerabilities in critical mineral supply chains. It underscores the risks of relying on a single dominant producer amid geopolitical flashpoints. In civilian sectors, higher costs affect aerospace, automotive, semiconductors, and tooling, potentially elevating manufacturing expenses globally.
For investors and policymakers, tungsten illustrates why nations should prioritize "just in case" strategies over "just in time" efficiencies. As the Iran conflict continues with no swift resolution—Hormuz still contested and regional tensions high—the "war metal" rally shows no signs of abating. Buyers continue exhausting stockpiles, and strategic reserves are growing. Unless new non-Chinese mines scale up meaningfully or diplomatic efforts ease export restrictions, tungsten's trajectory remains upward, a quiet yet powerful reminder that modern warfare is fought not just with troops and technology, but with the scarce elements that equip them.
In Burnaby and beyond, where everyday consumers feel the pinch of oil shocks, this obscure metal's boom quietly reshapes global security and industrial priorities—one armored vehicle, one missile, and one strategic stockpile at a time.
