China has established itself as a dominant player in the global supply chain for many critical minerals, including tungsten. This metal, known for its hardness and energy density, plays a crucial role in various industries such as weapons, automobiles, electric car batteries, semiconductors, and industrial cutting machines. Major companies like Taiwan Semiconductor Manufacturing Company and Nvidia rely on tungsten for their production processes.
Despite its overwhelming control over the tungsten supply chain, China has refrained from imposing significant restrictions on the metal. While the Biden administration implemented tariffs on tungsten imports, China did not reciprocate by including the metal in its new regulations for rare earths production. This strategic move indicates China’s cautious approach to avoid escalating tensions with the United States.
The international market for tungsten is witnessing a shift as countries seek to diversify their supply chains away from China. Companies like Almonty Industries are investing in reopening tungsten mines outside of China, with a focus on regions like South Korea. The U.S. has introduced legislation to reduce reliance on Chinese tungsten in military equipment, while the European Commission extended tariffs on imported Chinese tungsten carbide.
The increasing demand for tungsten, coupled with limited global supplies, has driven prices to multi-year highs. However, challenges remain, especially for countries like the U.S. that have limited domestic tungsten production capabilities. Efforts to expand tungsten mining operations outside of China have faced logistical and regulatory hurdles, delaying their impact on the global market.
Despite China’s stronghold on the tungsten supply chain, there are opportunities for other countries to enhance their presence in this crucial market. Projects in regions like South Korea and Canada aim to reduce reliance on Chinese tungsten and provide a more diversified supply base. Collaboration between governments, industry stakeholders, and investors will be essential to expand the global tungsten market and ensure a stable supply chain.
China’s dominance in the tungsten supply chain presents challenges and opportunities for the global market. As countries seek to reduce dependency on Chinese supplies, there is a growing focus on diversification and strategic investments in tungsten mining projects outside of China. By fostering collaboration and innovation, stakeholders can navigate the complexities of the tungsten market and build a more resilient supply chain for critical minerals.