Supply Shortages And Defense Demands Have Driven The Price Of Tungsten Ferroalloy To Double.

London, March 12th (Argus) - European tungsten iron prices have more than doubled this year, supported by the tightening supply from integrated tungsten enterprises, while demand from the defense sector continues to rise.
Argus assessed the pre-tax Rotterdam price of European tungsten iron at 280-295 US dollars per kilogram on March 10th. This represents a 108% increase from the beginning of the year and is more than six times higher than a year ago. The price reached a historical high in July and has shown no sign of stopping since then. This upward trend began on February 4th when China, as the largest tungsten producer, expanded the export control of dual-use items, including several tungsten products. Tungsten iron itself was not directly restricted, but the policy shift encouraged Chinese producers to produce more downstream products, thereby tightening the global raw material supply.
The depletion of many high-grade mineral deposits in China, stricter environmental policies, and the closure of small mines have further limited supply. At least until 2027, there is no expectation of a large amount of new capacity coming online, which reinforces the expectation of long-term supply shortage. European buyers continue to seek tungsten iron, but the purchase volume is getting smaller - mostly less than 5 tons, purchased on an as-needed basis. Sellers only provide the minimum quantity because they may not be able to replenish it once sold out.
During the previous rally, steel mills, foundries, and alloy producers would adopt a wait-and-see attitude, waiting for price adjustments. But this increase has far exceeded what many people thought was possible. At the end of last year, some industry participants stated that the tungsten iron price might reach an upper limit of around 150 US dollars per kilogram by mid-2026. However, the price in Europe has already climbed to 200 US dollars per kilogram in February and is now approaching 300 US dollars per kilogram. The soaring tungsten iron prices due to the growing defensive role and the conflict in the Middle East highlight the military uses of tungsten. After the first attack on Iran on February 28th, European tungsten iron prices immediately rose by 21%.
In addition to the aerospace and power industries, cutting tools and industrial processing are also stable consumers of tungsten steel. Some participants stated that a significant price increase might eventually suppress downstream demand and trigger price adjustments, but most believe that prices are unlikely to fall significantly until the structural shortage of tungsten ore begins to ease.