China will begin restricting exports of tungsten, a critical metal used in weapons and semiconductors, starting December 1, 2024. This move seeks to control a market where the Asian country dominates 80% of the supply chain. The measure, which includes new licensing requirements for exporters, is part of restrictions on dual-use, military and civilian products, according to China’s Ministry of Commerce.
Global context and trade tensions
Tungsten is key in the technology and defense industry. The United States has prohibited its contractors from buying tungsten mined in China starting in 2027, and in September increased tariffs on this metal by 25%. These policies reflect growing tensions between both nations, driving demand for alternative sources of tungsten outside of China.
Expanding Mining projects
While China implements restrictions, countries such as South Korea and the United States are moving forward with reopening mines. In South Korea, the Sangdong mine, operated by Canada’s Almonty Industries, is preparing to resume production in 2025, promising to cover 50% of its total capacity.
In Idaho, United States, the company Demesne Resources plans to begin extraction at the IMA mine by spring 2025, signaling an effort to diversify the supply of this critical metal.
Impact on the market and prices
The current price of tungsten, about $335 per metric unit, has not reacted significantly to the Chinese restrictions. However, analysts such as Emre Uzun of Fastmarkets predict that global demand will keep prices high in the short term, until new projects increase supply at the end of 2025.
America and Europe: strategic bets
With 45% of the tungsten from the Sangdong mine committed to the United States, friendshoring is emerging as a key strategy to reduce dependence on China. In addition, countries such as Kazakhstan, Australia and Spain are also developing projects to diversify the sources of this essential resource.
Future of tungsten and its relevance
Tungsten will continue to be a critical component in the technology and defense industry, especially in a context of growing demand and geopolitical tensions. Initiatives to develop mines outside China, along with protectionist policies in Western countries, reflect a global effort to balance the market and ensure the availability of this strategic resource.
This shift in the tungsten landscape not only redefines market dynamics, but also underscores the importance of ensuring resilient supply chains in an increasingly interconnected world.
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