Tungsten prices in China have surged to record levels as investors and industrial buyers reassess the metal’s strategic value. On 3 March, China Tungsten Online recorded another across‑the‑board increase in key products, with black and white tungsten concentrates jumping by Rmb20,000 per metric ton to around Rmb850,000 per ton. The rally follows earlier gains: most principal tungsten products are up 70–80% already this year, catapulting the metal from an industrial input to a perceived strategic hedge.
The supply picture underpins much of the move. Domestic mining capacity is tightly controlled and increasingly concentrated in China; stricter compliance and trade oversight, falling ore grades in older mines and constrained new mine output have all thinned near‑term availability. Post‑Chinese New Year mine restarts have lagged downstream manufacturing, and export controls and a lack of global upstream capacity make supply very inelastic to sudden demand shocks.
Geopolitics has amplified demand. Tungsten’s physical properties — extreme hardness and high melting point — make it indispensable for armor‑piercing cores, gun barrels, rocket nozzles and other military components. Fresh military strikes in the Middle East in late February have triggered an immediate reappraisal of stockpiles and procurement plans, prompting both hoarding by state and private actors and speculative buying by market participants.
The capital market response has been dramatic. The Shanghai‑Shen A‑share tungsten group led sector gains in February, rising nearly 50% on average, with individual companies’ share prices exploding. China Tungsten High‑Tech’s stock climbed roughly 139% year‑to‑date through late February and now trades at a rolling P/E near 96x; Zhangyuan Tungsten carries static and dynamic P/Es north of 250x and 200x respectively. Regulators and the companies themselves have flagged share‑price anomalies and the risk of sharp corrections.
That gap between raw‑material prices and corporate profitability is critical. Many listed producers lack sufficient captive ore to insulate margins from market prices and still rely on external purchases of concentrate or ammonium paratungstate. A rapid rise in input costs will not translate one‑for‑one to company earnings; managements warn that higher raw‑material bills and soft downstream demand could lead to “have‑price‑but‑no‑market” conditions as buyers step back.
Going forward, the trajectory of tungsten prices will hinge on three variables: the course of geopolitical tensions, the pace at which China’s mines can sustainably raise output within regulatory limits, and whether buyers — from defence contractors to carbide toolmakers — accelerate restocking. Policy interventions are also plausible: Beijing may tighten exports further to preserve strategic supply or, conversely, ease domestic controls to calm prices if social or industrial strains appear.
For global manufacturers and policymakers the episode is a reminder that critical minerals markets can shift far more rapidly than finished‑goods supply chains. Companies dependent on tungsten should reassess procurement strategies, consider hedging or substitution where feasible, and monitor inventory and disclosure from Chinese producers closely. Investors should be wary of valuation extremes; where P/Es reach triple digits, price reversals can be abrupt if fundamentals fail to catch up with sentiment.