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Tungsten industry research report: supply contraction, demand recovery
Abstract Tungsten is one of China's most significant natural resources, playing a crucial role in both industrial and military applications. As a non-renewable resource, global tungsten reserves are expected to last less than 40 years, prompting increased global attention on resource sustainability. China holds the world’s largest tungsten reserves, accounting for more than half of the top ten mines globally. Domestically, tungsten deposits are primarily concentrated in provinces such as Jiangxi, Hunan, Guangxi, and Fujian. With the increasing consumption of primary tungsten resources, waste tungsten has emerged as a valuable secondary source due to its high concentration and ease of recovery.
The Chinese government has continuously implemented policies to regulate the tungsten industry since it was first classified as a protected mineral in 1991. These measures have included production caps, export quotas, tax rebates, and tariffs. However, rampant illegal mining has undermined the effectiveness of these regulations. In response, Minmetals, a leading state-owned enterprise, has taken on the responsibility of consolidating domestic tungsten resources.
Minmetals Nonferrous Metals holds a dominant position in the sector, controlling over 90% of tungsten resources in Hunan Province through its full ownership of Hunan Nonferrous Metals. It also oversees the highly competitive Zhuzhou Cemented Carbide Plant. Currently, Minmetals controls more than 75% of China’s tungsten resources and dominates the country’s tungsten exports. By centralizing pricing authority and raising quotations, Minmetals has significantly influenced global tungsten prices, even triggering a 15% rebound in the market. This demonstrates the company’s growing influence over the industry.
On the demand side, tungsten remains essential in various high-tech and defense applications. While global supply and demand are relatively balanced, China’s domestic consumption structure is imbalanced, with low demand for hard alloys. However, cemented carbide is gradually replacing traditional tools due to its superior hardness, wear resistance, and heat tolerance. The "12th Five-Year Plan" emphasizes the development of advanced cemented carbide products, with cities like Xiamen in Fujian and Zhuzhou in Hunan emerging as key production hubs. We expect tungsten carbide demand to grow at a rate of 4% over the next three years, while tungsten steel demand will increase by 5%. Rising downstream demand is likely to drive a sustained recovery in tungsten prices.
Looking ahead, the tungsten industry is expected to focus on the theme of “supply contraction + demand recovery.†Stricter control over tungsten concentrate mining and improved demand from downstream sectors will support a steady price increase. The extent of this recovery will depend on broader economic improvements. Investors should pay close attention to the tungsten sector in Fujian and companies benefiting from rare earth integration, such as Xiamen Tungsten Industry.