Tungsten Crunch Can Be Fixed Before Prices Spike Further: BMO

Why It Matters

Tungsten’s unique hardness makes it indispensable for manufacturing, mining and defence; a prolonged supply crunch could raise costs across these critical sectors and reshape global critical‑minerals strategies.

Key Takeaways

• Prices rose fivefold in one year.
• China supplies roughly 75% of global tungsten.
• Inventories at historic lows; 2026 deficit forecast.
• Artisanal mining and recycling can't close supply gap.
• High prices required to incentivize new mine development.

Pulse Analysis

The tungsten market has entered a rare stress test, with Fastmarkets reporting a jump from $300 to $1,775 per tonne after Chinese export curbs took effect. China’s dominance—accounting for three‑quarters of global supply—means that declining ore grades, stricter environmental regulations, and tighter export controls reverberate worldwide. Low stockpiles and a projected 2026 deficit have pushed prices to unprecedented levels, prompting analysts to label the situation a "tungsten crunch" that could ripple through sectors that rely on the metal’s extreme hardness.

BMO’s research outlines five pathways to rebalance the market, yet none offers an immediate cure. Expanding Chinese mine output is hampered by grade and permitting challenges, while new projects abroad face lengthy development cycles. Artisanal miners may boost supply modestly, and recycling could grow if China invests in collection infrastructure, but both are unlikely to offset the shortfall. Consequently, the firm expects a near‑term mix of artisanal growth and limited demand destruction to temper prices, while acknowledging that only sustained, above‑historical price levels will attract the capital needed for new primary mining ventures.

For industry leaders, the implications are clear: continued price volatility will affect the cost structure of cutting tools, drill bits, and defence components that depend on tungsten carbide. Policymakers may need to incorporate tungsten into critical‑minerals strategies, encouraging domestic recycling and supporting exploration incentives. As reindustrialisation and defence budgets rise, demand pressure will persist, making the metal a focal point for supply‑chain risk management and strategic investment decisions.