Since the start of 2026, China’s tungsten industry chain has seen an unprecedented, historic rally.
According to Mysteel data, on March 2, 2026, after breaking above RMB 1,800/kg in the preceding days, tungsten powder prices climbed to a high of RMB 1,865/kg—up nearly fivefold from around RMB 300/kg a year earlier.
The capital markets responded enthusiastically. The minor-metals segment took turns surging, and in January 2026 the A-share tungsten mining index (884857.WI) entered an accelerated uptrend. From January 5 to January 16, the index jumped from 3,474 points to 4,476 points, posting a 28.8% gain over 12 trading days. The strength carried into February, with monthly turnover reaching 37.78% and trading value hitting RMB 25.3 billion, indicating highly active capital flows. Zhangyuan Tungsten’s cumulative turnover in February reached 49.92%; the Dragon & Tiger list showed that institutions and Shenzhen-Hong Kong Stock Connect (southbound) together recorded net purchases of more than RMB 600 million, making it a key barometer of market sentiment.
Since the beginning of 2026, the tungsten mining index has risen a total of 120%, while leading stocks Xianglu Tungsten and Zhangyuan Tungsten have both gained more than 200% year to date.
Notably, this surge has not been policy-driven; it has been propelled by a hard supply-demand gap. Mining quotas have not been materially tightened, but resource depletion and environmental constraints have effectively created “implicit production curbs.” The market’s valuation logic for “non-renewable strategic resources” is being reshaped.
And with the added force of geopolitical rivalry, it is evolving into a rehearsal for a contest over pricing power in strategic metals.
Key Drivers for Tungsten’s Price Surge
Supply side: China’s “visible hand” tightens, while incremental overseas supply is a drop in the bucket
China controls about 82% of global tungsten ore output. As the world’s largest holder and supplier of tungsten resources, it enforces strict caps on total mining volume. In 2025, the total tungsten ore mining quota was 67,000 tonnes, limiting supply elasticity at the source. GF Securities noted in a research report that the first batch of China’s 2025 total-control quotas for tungsten concentrate mining was cut by 6.5% year on year. Coupled with stringent environmental and safety inspections that severely restricted off-quota tungsten mine output, effective supply continued to shrink.
Although high tungsten prices spurred progress on tungsten projects in Kazakhstan, Canada, South Korea, and Australia, capacity ramp-up has been extremely slow due to constraints such as infrastructure, technical requirements, and environmental permitting. Minmetals Securities estimated that in 2026, newly added overseas tungsten mining capacity (not controlled by Chinese capital) might be less than 5,000 tonnes (65% WO₃), unlikely to change the tight global supply-demand gap.
Demand side: emerging tracks take off, reshaping the demand mix
As the photovoltaic industry moves toward larger formats and thinner wafers, diamond wire busbars are evolving toward finer tungsten wire. Some institutions projected that in 2026, the penetration rate of tungsten wire in photovoltaics was expected to exceed 80%, and the incremental tungsten demand from the PV sector alone would account for more than 5% of total global demand.
Tungsten is known as the “teeth of industry” and is an indispensable material for cemented carbide, cutting tools, and special steels for defense applications. As China’s high-end manufacturing continues its transformation and upgrade, demand for high-performance CNC cutting tools has kept rising. Meanwhile, against the backdrop of heightened global geopolitical tensions, stockpiling demand from the defense sector has also provided solid support for tungsten prices.
In advanced chips at 3nm and below, demand for ultra-high-purity tungsten as a fill material surged. While the absolute volume is not large, its exceptionally high value-added and formidable technical barriers further amplify tungsten’s strategic importance.
In practice, however, the landscape is still led by China. From January to October 2025, China imposed export controls on 25 tungsten products. According to Antaike, China’s cumulative exports of tungsten products in 2025 totaled about 13,100 tonnes, down 27.5% year on year. In early 2026, China tightened controls on dual-use items exported to Japan, and the decline in the Japanese market was expected to widen. Even if the U.S. pushes AI-based pricing, the model is unlikely to capture China’s vast volume of non-public domestic transactions, strategic stockpiling, and producers’ reluctance to sell, making it difficult in the short term to undermine the “anchoring effect” of China’s tungsten prices.
Supply-chain opportunities: profits are concentrating upstream, while midstream and downstream players come under pressure
The surge in upstream raw-material prices for tungsten metal is being transmitted rapidly down the supply chain, triggering a deep reshuffle across the industry.
Upstream miners are seeing a clear release of earnings leverage. Take Zhangyuan Tungsten as an example: its cost per tonne of tungsten concentrate is about RMB 70,000, versus a current price of RMB 138,000 per tonne. Gross margin has jumped from 45% to 68%, and net profit shows a tungsten-price sensitivity factor of 1.8 (a 10% price increase lifts net profit by 18%). The value of resource reserves needs to be recalculated: for each additional 10,000 tonnes of tungsten reserves, implied market value has risen from RMB 5 billion to RMB 8 billion.
In the midstream smelting and processing segment, the ability to pass through costs stands out. Xiamen Tungsten has achieved above-normal gains through long-term contracts and inventory strategies. Processing fees for ammonium paratungstate (APT) have been squeezed from RMB 12,000 per tonne to RMB 8,000 per tonne. Xiamen Tungsten has partially hedged risk via long-term contract arrangements, but losses have already emerged among small and mid-sized players. High-end ultrafine tungsten powder (used in 3C products) still maintains gross margins of more than 15%.
Downstream users are facing sharply higher cost pressure. For cemented carbide manufacturers, the share of raw materials in total cost has risen from 40% to 55%. Some companies have raised prices by 5%–10%, but high-end cutting tools face substitution risk from ceramic materials. Demand from defense and new energy is relatively rigid, so cost pass-through is stronger, though gross margin may still decline by 3–5 percentage points.
Relentless upward pricing pressure is forcing the industry to accelerate its transformation. On one hand, companies are ramping up R&D investment and improving manufacturing processes to reduce raw-material losses, while upgrading toward higher value-added products such as ultrafine tungsten wire for photovoltaic applications; on the other hand, the scrap-tungsten recycling (recycled tungsten) segment is seeing new opportunities, easing tight primary tungsten supply by building “urban mines.”
Taking into account views from multiple institutions, the market generally believes that tungsten prices have entered a long-term upward channel, one that will be hard to reverse in the short term.
Rao Wenbo, an analyst at Shanghai SteelUnion, believes tungsten prices are more likely to rise than fall in the near term. Over the long run, the “scissors gap” between resource depletion and expanding demand is difficult to undo, meaning tungsten prices may trend upward for an extended period. GF Securities notes that amid a push overseas to expand strategic stockpiles, tungsten ranks relatively high in priority; given the current supply-demand dynamics, it remains bullish on the tungsten sector. Guoyuan Securities says that supply constraints and optimistic expectations for the strategic-metal value proposition continue to provide a solid foundation for the market; under today’s generally cautious-but-slightly-optimistic sentiment, the tungsten raw-materials market may stay in a tight-supply, strong-price state.
Looking ahead to the rest of 2026, tungsten prices will most likely remain in a high-level range-bound pattern. Upward support comes from persistently low inventories, rigid demand from photovoltaics and semiconductors, overseas strategic reserves, and expectations of national stockpiling—together forming a floor under prices. Upward pressure comes from intensifying cost burdens on downstream companies: some small and mid-sized manufacturers may cut output or postpone orders; if substitute solutions emerge for tungsten wire technology (such as tungsten carbide composites), long-term demand could be capped.
Key points to watch include how mining quotas are implemented after the March “Two Sessions,” whether downstream restocking continues, and whether the scrap-tungsten recycling rate can break above 37%. Leading companies such as Zhangyuan Tungsten, with full value-chain layouts and resource reserves, are expected to continue benefiting. The company’s 2025 earnings guidance showed net profit up 51–86% year on year, and its performance in the first quarter of 2026 is expected to beat expectations again.
From a “supporting role” in industrial manufacturing to a “leading role” in geopolitical competition, tungsten’s value is being re-rated as never before. This 2026 surge is a three-part symphony of supply constraints, emerging demand, and great-power rivalry. For China’s tungsten industry, it is not only a feast marking the return of resource value, but also a forcing mechanism pushing the supply chain toward higher-end and greener development. On this track where scarcity is becoming ever more pronounced, the chorus of “higher prices” may only just be starting.
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