Defense Metal Tungsten Outpaces Gold, Copper in Massive Price Rally

Tungsten, a niche industrial metal mainly used in weapons and defense manufacturing, has quietly become one of the world’s best-performing commodities, outpacing gold and copper over the past year.

Prices for ammonium paratungstate, the main tungsten benchmark, have surged to around US$2,250 per metric ton unit in Europe, according to Fastmarkets data published by Almonty Industries (TSX:AII,NASDAQ:ALM).

The metal has climbed roughly 557 percent since China placed export controls on certain tungsten products last year, sending manufacturers scrambling to secure supply.

The metal’s physical properties, such as extreme hardness, density and resistance to heat, make it indispensable in armor-piercing ammunition, aerospace components, semiconductors and heavy industrial cutting tools. Those uses have become more important as geopolitical tensions and military spending increase worldwide.

“In my 12 years working across the commodity space and dealing with a lot of weird and wonderful metals, I have never seen a market as tight as tungsten is right now — aside from maybe lithium in 2021,” George Heppel, vice president of commodity research at BMO Capital Markets, told Bloomberg.

Unlike lithium during its price surge, tungsten has relatively few projects ready to expand supply quickly.

“This isn’t like lithium, where there was a huge pipeline of projects that could come online,” Heppel added.

Tungsten’s surge highlights growing concern in the west over dependence on China for critical minerals.

According to the US Geological Survey, China produced about 79 percent of the roughly 85,000 metric tons of tungsten mined globally last year and also holds the world’s largest reserves. When Beijing added certain tungsten products to its export control list amid a trade dispute with Washington, shipments from China fell sharply.

Estimated exports of restricted tungsten products dropped about 40 percent last year.

Despite its strategic importance, tungsten remains a relatively small market compared with other metals. The global tungsten market this year is said to be worth about US$16 billion, roughly 5 percent the size of the copper market.

Still, tight supply has prompted governments and manufacturers to search for alternative sources.

Almonty recently began production at the Sangdong tungsten mine in South Korea, marking the restart of one of the world’s historically largest tungsten operations after more than three decades. The mine’s processing plant is designed to handle about 640,000 metric tons of ore annually, producing roughly 2,300 metric tons of tungsten concentrate.

A planned expansion scheduled for 2027 could double output to about 4,600 metric tons annually. At full capacity, the project is expected to supply roughly 40 percent of global tungsten demand outside China.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.