Based on the current market dynamics and industry analysis, the future market of tungsten may show the following trends:
1. Supply and demand pattern continues to be tight, and prices remain high and volatile
Supply side: The global tungsten ore resource concentration is high (China accounts for 52% of global reserves and 81% of production), but the domestic mine production space is limited, overseas new production capacity is mainly dependent on Kazakhstan, it is expected that the increase in 2025-2027 only accounts for 4.4%-6.6% of the global supply. Environmental protection policies and long mine development cycles (5-10 years) further restrict supply growth.
Demand side: Tungsten carbide (65% of consumption), special steel, semiconductors (tungsten for chip interconnect structure), aerospace (high-temperature components) and military (armour-piercing shells, armor) and other areas of strong demand. The development of new energy, 5G and other technologies will promote the average annual growth of tungsten consumption of about 2.6%.
Price forecast: In 2024, the price of tungsten concentrate has risen to a near 20-year high (143,000 yuan/ton), and CICC expects the global shortage will continue until 2027, and the price will be stable or strong.
2. Geopolitics and strategic reserves drive market volatility
Countries’ storage needs: Europe and the United States list tungsten as a key mineral, and the United States Department of Defense and the European Union’s Key Raw Materials Act strengthen its strategic position. At present, overseas tungsten inventory is at a historical low, and under the aggravating geopolitical risks, countries may increase strategic reserves and push up short-term demand.
Impact of export controls: China recently imposed export controls on 25 types of tungsten products such as ammonium paratungstate, further tightening global supply and stimulating prices. Similar policies have been validated for metals such as germanium and gallium.
3. Technological innovation and industrial chain upgrading reshape the industry structure
High-end application expansion: nanotechnology and intelligent manufacturing (such as AI-driven process optimization) are expected to improve the performance of tungsten products and expand the penetration rate in semiconductor, new energy and other fields.
Circular economy: The development of recycling technology (such as waste carbide recycling) or to ease the pressure on resources, but the current recovery rate is less than 20%, requiring continuous investment of policy and capital.
Industrial chain integration: China’s leading enterprises enhance their bargaining power through the whole industrial chain layout (mining – deep processing – recycling) to cope with raw material fluctuations.
4. Regional market differentiation and trade pattern adjustment
China’s dominant position strengthened: the domestic policy of replacing old with new and the upgrading of manufacturing industry drove demand, and the concentration of industrial clusters such as Jiangxi and Hunan increased.
The rise of emerging markets: Southeast Asia to undertake the transfer of the global supply chain, superimposing the trend of localized production in Europe and the United States, may give birth to regional tungsten processing centers.
5. Investment risks and opportunities coexist
Risk factors: rising environmental costs, supply chain disruptions due to geopolitical conflicts, and increased competition for alternative materials such as rare earth alloys.
Investment hotspots: tungsten carbide (expected to reach 10.6 billion yuan in 2024 market segment), tungsten carbide and other high-end materials, as well as leading enterprises with resources and technical barriers.
Summary and prospect
In the next 3-5 years, the tungsten market will show the characteristics of rigid supply + diversified demand + policy catalysis, and the price center is expected to gradually move up. Long-term attention should be paid to resource development efficiency, recycling technology breakthrough and international policy game. It is recommended that investors pay attention to enterprises with the advantages of the whole industry chain, and be alert to the volatility risks caused by short-term policies and inventory cycles.
