Why did the price of tungsten materials soar in 2025?

  The sharp increase in tungsten prices in 2025 was mainly driven by multiple factors such as supply-demand imbalance, policy regulation, and international competition. The core reasons are as follows:

The supply side continues to contract.

  The mining quotas have been significantly reduced: In 2025, the first batch of tungsten mining quotas in China dropped to 580,000 tons, a decrease of 6.45% compared to the previous year. The main production areas such as Jiangxi saw a decline of over 10%, while quotas in places like Hubei and Anhui even reached zero, resulting in an expansion of the gap in primary ore to 12%.

Increased mining costs and resource depletion: High-grade tungsten ores (such as black tungsten ore) are on the verge of depletion. The original ore grade has dropped from 0.42% to 0.3%-0.5%, and the mining cost has exceeded 100,000 yuan per ton. The proportion of small and medium-sized mines that have shut down exceeds 30%.

  Environmental protection constraints have intensified: wastewater discharge standards have been raised by 50%, the safety level of tailings ponds has been upgraded, and environmental protection investment accounts for 18% of production costs, thereby squeezing effective production capacity.

Structural surge in demand side

  High-end manufacturing sector demand surges: The proportion in the military industry has risen to 12%, and the usage of special equipment and hypersonic missile thermal protection systems has doubled; the domestic substitution rate of hard alloy cutting tools has reached 78%, and the renewal of CNC machines has shortened the order delivery cycle.

  New Energy Technology Breakthrough: The penetration rate of photovoltaic tungsten wires has exceeded 14% (12,000 kilometers of single GW components are required), and the global market size exceeds 20 billion yuan; the demand gap for nuclear fusion tungsten components reaches 5,500 tons, driving the price to rise.

  Emerging Fields Expansion: The usage of low-altitude economy drones, semiconductor equipment, and large-scale infrastructure (such as shield machine cutter heads) has increased by 26.3% year-on-year.

Policy and competition for international resources

  Domestic policy regulation intensifies: The export quota system for products is implemented with "one product, one certificate"; the export price of tungsten and iron is controlled at $385 - $395 per kilogram; the reform of resource tax may increase the cost of mines by another 10%, forcing an upgrade of the industry.

Global Strategic Reserve Competition: The EU has launched a tender for 20,000 tons of tungsten reserves (accounting for 15% of global consumption), the US plans to establish a national reserve, the spot premium rate has soared to 6.5%-8%, and traders' hoarding accounts for 30% of the circulating inventory.

Geopolitical impact: The conflicts in the Middle East have increased the value of strategic resources. China accounts for 83% of global production. The competition in the supply chain has intensified price fluctuations.

Overall impact and risks

  The supply-demand gap reached 2,642 - 4,679 tons, driving the price of black tungsten concentrate to rise by 19% - 21% within the year, and it broke through 18.400 yuan/ton in July, reaching a new historical high. However, downstream hard alloy enterprises reduced production due to cost overruns (with gross profit margins falling below 10%), and the potential substitution of silicon carbide cutting tools and other technologies may restrain the growth.