While investors fixate on gold, silver, and copper, another metal has staged a far more dramatic move. Tungsten prices have quietly risen by around 500% over the past year, and the factors driving the repricing are unlikely to go away.
In a Monday note, BMO Global Commodities Research warns that the market has "sleepwalked" into a supply crunch. Analysts George Heppe and Helen Amos point to declining ore grades, tightening environmental restrictions, and chronic underinvestment in new capacity. These factors have collided with export constraints from China, leaving global inventories critically low.
With another supply deficit forecast for 2026, BMO says tightness is likely to persist even at sharply higher prices.
An Invisible Component
Tungsten is rarely in the market spotlight, given how important it actually is. It has the highest melting point of any metal and a density similar to gold. In carbide form, it is exceptionally wear-resistant, making it vital for cutting, drilling, and high-performance machining.
It is also indispensable in defense applications. Density and strength make it the choice for armor-piercing munitions. It is hard to substitute because few metals combine extreme heat tolerance, hardness, and density.
But that industrial importance now collides with the supply profile. As is the case with many critical metals, China accounts for the majority of production (roughly three-quarters) and downstream processing. Since Beijing has tightened environmental standards and restricted exports, shipments of key intermediates (like ammonium paratungstate) have plunged.
Five Ways Out
To rebalance the market, BMO sees five possible, yet imperfect pathways. Chinese mine supply could expand – though grade depletion and regulatory constraints limit that speed. Projects outside China are advancing, yet permitting, financing, and construction timelines mean meaningful new output is years away.
Artisanal mining could respond to higher prices and expand capacity, but it accounts for only a small share of global supply. Recycling is another option, especially if China commits to it, yet it requires investment and time. Finally, demand destruction could emerge at elevated prices, though substitution is challenging given tungsten's unique properties.
Curing Higher Prices
In the meantime, prices may have to do the heavy lifting. "The cure for high prices is high prices," the analysts wrote, repeating the mantra often used by legendary natural resource investor Rick Rule.
Sustained elevated prices, they argue, are the only reliable mechanism to incentivize the capital spending required to develop new mines and processing capacity. However, there are early signs that the market has moved.
In Nevada, ASX-listed Viking Mines has highlighted high-grade intercepts at its Linka project, including near-surface zones approaching 1% WO₃ over meaningful widths. Meanwhile, in Manitoba, Canada's ONGold Resources Ltd. (OTCQB:ONGRF) is re-sampling historical core at its Monument Bay gold-tungsten project. It's earlier drilling returned intervals such as 17.4 meters grading 0.51% WO₃.
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