China's tightening grip on global tungsten supply, and uncertainty over its future role as a net buyer or seller, has become the dominant factor shaping global investment strategy, industry participants said last week at the International Tungsten Industry Association (ITIA) conference in Helsinki.
China's export controls on key tungsten products such as ammonium paratungstate (APT) and its surging appetite for tungsten concentrates is causing a notable supply shortage in the rest of the world and has pushed prices to record highs.
Now market participants are considering if the current dynamics will remain long enough to support new projects outside China or if changes to China's policies could extend the uncertainty.
China produces 80pc of global APT supply but since Beijing extended its export licence system in February, official customs data show that China's APT exports dropped by 42pc in January-June 2025 compared with the same period in 2024. Similarly, shipments of tungsten trioxide (W03) declined by 76pc. As a result, European buyers are struggling to secure units and prices are surging.
APT prices rose to fresh highs of $580–645/metric tonne unit (mtu) duty unpaid Rotterdam on 16 September, up from $550–600/mtu on 11 September and up by 20pc since the start of the year. Similarly, European tungsten concentrate prices rose to $500-520/dry mtu (dmtu) in-warehouse Rotterdam on 18 September, up by nearly 30pc year on year.
At the same time, China is purchasing concentrates at an unprecedented pace. In the first half of 2025, China's tungsten concentrate imports rose by 75pc compared with the same period in 2024.
Navigating this shift is a concern not only for industry veterans and midstream companies, but also for new European projects set to come on line in Portugal and Spain by 2027 with the backing of the EU Critical Raw Materials Act, Argus heard.
"There is a structural shift in the market — this is not just about price, the whole way the industry operates has to be rethought," a supplier in Vietnam told Argus on the sidelines of the conference.
Consumers and midstream players are seeking alternative suppliers and revising their sourcing strategies, including buying concentrates instead of APT and forging closer ties with countries such as Vietnam. Meanwhile, Japanese buyers are increasing recycling rates and intensifying relations with smelters in Germany and the US.
Traders are under pressure to respond rapidly yet often find themselves on the sidelines as limited supply is directed straight to end consumers. They are therefore looking ahead with long-term strategies.
Doubts remain over new western supply
Although these recent shifts in the market support the case for investing in new western supply sources, new projects coming on line must convince investors and shareholders that current supply constraints are a long-term issue, and will not be reversed by changes in China's policy.
"Tungsten projects are a hot topic at the moment, but we have to take into account that most mining projects remain many years away from production," one trader said.
Geopolitics and trade will continue to shape the market's future, even if these are not always reliable metrics for long-term planning.
"Tungsten has become too political — it was always to some extent, but now it has been weaponised," a second trader told Argus. "It's very reactive, just so hard to navigate," a third agreed.
For equity investors considering supply funding for greenfield or brownfield projects, long-term uncertainty remains a significant obstacle.
Much of the discussion centred on the development of the trade war between China and the US, as well as the evolving relationship between these two superpowers.
"The US is also accelerating efforts to secure its own supply and investing in mines. Europe is caught in the trade war, but it should bring investments as well," the third trader added.
The outlook should become clearer in the coming months, with prices expected to stabilise at high levels in Europe and China, some sources say, enabling different market players to make informed decisions regarding their businesses and procurement strategies.
China's domestic demand outpaces supply
Meanwhile, representatives of Chinese companies consistently state that China's surging tungsten concentrate imports are being driven by strong domestic demand.
"We don't want to export raw materials — this is a clear trend," Chongyi Zhangyuan Tungsten's vice-president Yin Lei told the conference. "Demand is outstripping supply in China."
China's value-added strategy has shifted from a low-cost manufacturing base toward high-value industries. Industry forecasts project that tungsten-wire demand from the photovoltaic sector will grow at an average annual rate of 40-50pc over the next five years, requiring approximately 8,000t of tungsten per year by 2027.
"It is unlikely that China will purchase concentrates for internal use, and then flood the European market with them," one source said. "They have the ability to do so, but that scenario seems implausible."
