Title: China’s Strategic Shift in Tungsten Export with a Focus on U.S Market

China has recently unveiled its plan to start limiting its exportation of the essential metal, tungsten, creating a significant shift in the global metal supply chain. This move comes after years of China’s dominance in the tungsten market, controlling up to 80% of the global supply per Argus’ report. Tungsten, a metal known for its incredible hardness, finds its use in the production of weapons and semiconductors.

In a bid to limit the exportation of “dual-use” goods — items with potential military or civilian use, the Chinese Ministry of Commerce released a list earlier in the month showing businesses interested in exporting a variety of tungsten and other vital mineral products would need to secure licenses. The new regulation will go into effect starting December 1.

This strategic move from China comes at a time when tensions between the U.S. and China are escalating, leading to an increase in demand for non-China sourced tungsten. The U.S. Defense Department has issued an order prohibiting its contractors from purchasing tungsten mined from China, starting January 1, 2027.

Christopher Ecclestone, a principal and mining strategist at Hallgarten & Company, commented on the new regulations. He pointed out that the driving factor for more tungsten production is not the Chinese ban itself, but the potential profitability the ban could bring to mining tungsten.

Ecclestone highlighted that the announcement from China had not significantly impacted tungsten prices. For the mining industry to reap significant profits from tungsten, he estimates that the prices need to climb $50 above the current price of around $335 per metric ton units of ammonium para tungstate.

Meanwhile, the U.S has raised tariffs on Chinese tungsten by 25% in September, which could potentially encourage more tungsten production. The majority of public comments on the U.S. tungsten tariffs were in favor of the duties, citing benefits for domestic manufacturing. Some even suggested increasing the duties to 50%.

The U.S. has not engaged in commercial mining of tungsten since 2015, according to official records. However, this year, Almonty Industries, a Canada-based company, announced plans to reopen one of the world’s largest tungsten mines in South Korea.

This potential shift in the tungsten market is expected to impact the U.S. and China’s economic relationship. With China limiting its tungsten export and the U.S. increasing tariffs on Chinese tungsten, there’s a significant possibility for other countries to fill the gap in the tungsten market.

In conclusion, China’s decision to limit its tungsten export could trigger significant changes in the global tungsten market. This shift may lead to the reopening of mines in other countries, potentially altering the dynamics of the global supply chain.