Via miningnewsnorth.com
China's export curbs and surging AI chip demand have created a perfect storm for the metal most people forgot existed.
The world’s AI ambitions have a bottleneck, and it’s not chips, capital, or even electricity. It’s a dense, gray metal that most people associate with light bulbs their grandparents used.
Tungsten, a critical input for manufacturing high-performance semiconductors, is running dangerously low on the global market. Prices have surged as much as 622% in 2026, driven by a collision of Chinese export restrictions, rising military demand, and the insatiable appetite of AI chip fabrication. Two major Japanese producers have already shut down entirely, and the structural deficit isn’t going away anytime soon.
How we got here #
China controls roughly 80% of the world’s tungsten supply. Starting in 2025, China imposed export restrictions that limited the number of firms permitted to ship tungsten abroad. By 2026-2027, only 15 companies were authorized to export the metal.
Ongoing conflicts involving Ukraine and Iran have pushed defense-related tungsten demand higher. The metal is used in armor-piercing ammunition, missile components, and various military applications. Meanwhile, the AI industry’s demand for advanced semiconductors has been climbing at a pace that makes “exponential” feel like an understatement.
Tungsten hexafluoride, known as WF6, is used in chemical vapor deposition during chip manufacturing. Two of the world’s leading WF6 producers, Japan’s Kanto Denka and Central Glass, ceased operations entirely on July 1, 2026. Their reason was straightforward: they ran out of tungsten to process.
Together, those two firms accounted for about 25% of global WF6 capacity, roughly 2,200 tons per year.
The price shock and its ripple effects #
For semiconductor manufacturers like Samsung and SK Hynix, tungsten is embedded in their production processes, and there’s no quick substitute. Both companies are reportedly under pressure to diversify their supply chains, but alternatives to Chinese tungsten are limited and slow to develop. Global tungsten demand is projected to grow from approximately 143,000 tons in 2025 to 210,000 tons by 2035. Structural deficits are anticipated through at least 2028.
A mine in South Korea and a bet on scarcity #
One company positioning itself as part of the solution is Almonty Industries, which brought its Sangdong mine in South Korea to full production in July 2026. Sangdong is one of the few non-Chinese tungsten mines of meaningful scale.
Almonty announced a share buyback program on August 17, 2026, citing what it considers an undervaluation of its stock given the supply environment.
Still, one mine doesn’t solve a global deficit. Sangdong’s output, while significant, remains limited compared to the volume that China’s restrictions have removed from the market. The development pipeline for new tungsten projects outside China is thin, and the lead times are measured in years, not quarters.
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