Tungsten market participants seek clarity on the reach and implementation of US export controls on tungsten waste and scrap, warning that limited domestic processing capacity could constrain the policy's near-term impact and cause oversupply.
The US Bureau of Industry and Security (BIS), an agency within the Department of Commerce, announced last week that it will require domestic sellers of tungsten waste and scrap to allocate 100pc of their monthly sales to US buyers for a one-year period starting on 27 August.
The order also restricts black mass exports.
The upcoming restrictions on tungsten scrap exports are intended to keep more tungsten-bearing material in the US and encourage the development of additional processing capacity in the country.
But market participants say limited domestic refining capacity will constrain the measure's near-term impact, as the US lacks sufficient capability to convert scrap into intermediate and finished tungsten products at scale.
Many tungsten scrap dealers rely heavily on export markets, particularly in Asia. US exports of tungsten waste and scrap totaled 2,183 metric tonnes (t) from January-June 2026, nearly surpassing exports for the entirety of 2025 at 2,202t. Japan, Germany and South Korea were the largest recipients of US exports over that period.
As a result, several tungsten carbide scrap exporters warned of near-term oversupply in the US market, as material that would otherwise be exported may have limited domestic outlets.
"This is a death sentence for exporters," one trader told Argus. A second exporter said the new requirements will fundamentally "change the way we do carbide business", having to adjust strategy over the next year.
Carbide scrap buying further slows ahead of controls
Market participants broadly expect tungsten carbide scrap prices to come under further pressure in the near term as more material remains in the domestic market.
For now, buyers and sellers have largely adopted a wait-and-see approach while they assess how the restrictions will be implemented.
Only a few exporters reported spot purchases for small volumes under 10,000lbs last week to fulfill current orders before the controls take effect, while avoiding any additional orders.
As a result, market participants broadly anticipate that tungsten carbide scrap prices will decline in the coming weeks. Argus last assessed US tungsten carbide inserts and rounds prices at $28-34/lb fob US processor on 31 July, their lowest levels of 2026. Prices decreased 13pc and 12pc, respectively, month over month as most large processors maintained adequate supply for the next few months while operating near maximum processing capacity, limiting purchasing requirements.
Some exceptions expected
The ruling effectively establishes export controls on tungsten waste and scrap, although companies may request adjustments or exceptions on a rolling basis.
Multiple sellers expect export waivers to be granted primarily for material sent overseas for processing and refining with intentions to return tungsten units to the US.
Several sources described the measure as more of a control mechanism than a complete export ban, with exemptions expected to be granted provided sufficient material remains available for US defense requirements.
While defense demand for tungsten is expected to grow the sector accounts for only around 10pc of global consumption, according to 2025 estimates from Argus Tungsten Analytics, with automotive remaining the largest source of demand.
The US Defense Logistics Agency recently sought information on the potential future acquisition of up to 200t of tungsten hard scrap, publishing a request for information (RFI) on 27 July. The RFI does not guarantee that the DLA will issue a tender; rather, it is intended solely for information-gathering and planning purposes.
Market participants said waivers may be necessary until additional domestic processing capacity comes online.
"With this measure, the US administration is working to foster the growth of processing capacity within the country. The interesting question will be whether funding from the Department of Defense or Department of Energy will be directed toward plant expansions or increasing capabilities within US industry, much as they have done in the rare earths, antimony and tin sectors," Joseph Miller, director at mining company Mission Critical Metals, said.
Any new processing capacity could take years to develop, he added, and, for now, existing processors are expected to expand their capabilities rather than new entrants building significant new capacity.
