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Tungsten industry research report: supply contraction, demand recovery
**Abstract**
Tungsten is one of China's most significant strategic resources. As a non-renewable mineral, its global mining lifespan is estimated to be less than 40 years. This scarcity has drawn the attention of nations worldwide. China holds the largest tungsten reserves in the world, accounting for more than half of the top ten mines globally. Domestically, tungsten deposits are mainly found in provinces such as Jiangxi, Hunan, Guangxi, and Fujian. With increasing consumption, waste tungsten has become an important secondary source due to its high concentration and ease of recovery.
Over the years, the Chinese government has implemented frequent policies and tightened regulations on the tungsten industry. Since it was first classified as a protected resource in 1991, various measures have been introduced, including production quotas, export controls, tax rebates, and tariffs. However, illegal and unregulated mining has limited the effectiveness of these policies. In this context, Minmetals has taken on the responsibility of consolidating domestic tungsten resources.
Minmetals holds a dominant position in the domestic tungsten market. Through its subsidiary Hunan Nonferrous Metals, it controls over 90% of the tungsten resources in Hunan Province and owns the highly competitive Zhuzhou Cemented Carbide Plant. Currently, Minmetals Nonferrous controls more than 75% of China’s tungsten resources, representing over half of the country’s total production. It also holds a large share of the export quotas for tungsten products. By controlling both production and exports, Minmetals has significantly enhanced China’s influence in the global tungsten market. In October of last year, it regained pricing authority over its subsidiaries, unified pricing across the group, and caused a sharp 15% rebound in tungsten prices by raising quotes substantially. These actions suggest that Minmetals’ monopoly will have a growing impact on the future tungsten market.
On the demand side, there is a noticeable upward trend, with upgrading consumption patterns. Tungsten has broad applications, particularly in military and high-performance industrial sectors. While global supply and demand remain relatively balanced, China’s domestic consumption structure is still imbalanced, with low demand for hard alloys. Cemented carbide is gradually replacing traditional metal tools due to its superior hardness, wear resistance, and heat resistance. The “12th Five-Year Plan†highlights the development of high-end cemented carbide products, and cities like Xiamen in Fujian and Zhuzhou in Hunan are expected to become major production centers. We anticipate that the demand for tungsten in cemented carbide will grow at a rate of 4% over the next three years, while the demand for tungsten in steel will increase by 5%. This rising demand from downstream industries is expected to drive a recovery in tungsten prices.
Looking ahead, the tungsten industry is likely to focus on the theme of “supply contraction combined with demand recovery.†Tightening control over tungsten concentrate mining and the recovery of downstream demand are expected to lead to a steady rise in tungsten prices. The strength of this price recovery will depend on overall economic improvement. Investors should pay close attention to the tungsten sector in Fujian and companies involved in rare earth integration, such as Xiamen Tungsten, which stand to benefit from industry consolidation and policy support.