The tungsten market appears to have found a temporary floor after one of the most extraordinary price rallies in industrial metals history. Ammonium paratungstate (APT), the benchmark tungsten product, traded at 660,000 RMB per ton in China as of July 22, 2026 — down sharply from the Q1 peak of 1.3 million RMB but still dramatically above the 211,000-248,000 RMB range of early 2025.
The correction has been brutal for those who bought at the top but orderly rather than panicked. Tungsten powder declined to 975 RMB/kg by late July, down 59.4% from its March peak and 9.7% year-to-date. Scrap tungsten carbide rod held up better at 760 RMB/kg, still showing an 11.8% gain for the year. The price action suggests that while speculative froth has been blown off, the structural tightness that drove the initial surge remains firmly in place.
The numbers behind the deficit are striking. Medium-term forecasts point to a persistent global supply gap of approximately 20,000 metric tons per year from 2025 through 2028 — roughly 19% of total global demand. China controls about 80% of global tungsten mine output and has imposed strict dual-use export licensing that fragments the domestic Chinese market from the export market. A resumption of Chinese export restriction tightening would be the primary upside catalyst.
Demand is the other side of the imbalance. Defense procurement has surged as NATO members accelerate ammunition stockpiling. Tungsten heavy alloy is the core material for kinetic energy penetrators used by Western militaries. Military consumption alone is projected to increase roughly 12% in 2026. On the civilian side, ultra-fine tungsten wire for solar wafer cutting generates an annual demand surplus of over 4,500 tons. These are not cyclical buyers — they are structural consumers that will keep purchasing regardless of short-term price fluctuations.
The Western supply response is underway but insufficient to close the gap quickly. Almonty Industries is ramping the Sangdong mine in South Korea, targeting over 460,000 MTU per year in Phase 2. A US mine project, Gentung Browns Lake, received USD 219 million in funding and aims for first production in the second half of 2026. But these projects take years to reach full capacity, and in the meantime, Western buyers remain exposed to Chinese export policy and depleted global inventories.
For procurement teams, the July stabilization offers a planning window. China Tungsten Online described the market as "temporarily stable" in late July, with producers intent on supporting prices and buyers cautious. Transactions are predominantly back-to-back, tied to concrete downstream orders. The "rising-easily, falling-hardly" dynamic that analysts have described means prices will not collapse — the structural deficit provides a floor well above the 2020-2024 historical average.
The current stabilization is not a return to normal — it is a breather in a structural bull market. Buyers should use this consolidation phase to secure medium-term supply commitments rather than waiting for further correction. The risk of renewed upside from Chinese export policy tightening or additional defense procurement is material. Consider multi-year offtake agreements with non-Chinese producers where available, build APT price escalation clauses into downstream contracts, and increase integration of recycled tungsten carbide scrap into supply chains.