Tungsten Price Hits Record High, Industrial Chain at Crossroads of Structural Transformation

Record-breaking increases in tungsten prices are causing significant ripples throughout the industry. Over the past year since early 2025, prices for tungsten-related products have surged more than fourfold. Nearly all major products, including tungsten concentrates, intermediates, and powders, continue to hit new highs. This phenomenon is not just a price fluctuation but is prompting a restructuring of the entire industrial ecosystem.

“It’s no longer ‘tungsten steel’ but ‘tungsten gold’—that’s the situation,”—says a tool manufacturer executive, symbolizing the tension within the industry. The rapid changes in the tungsten market are broadly impacting corporate strategies, raw material procurement, and product development, making it impossible for any company to avoid this turning point.

Soaring Tungsten Prices Divide Industry Fortunes

The rise in tungsten prices is having extremely divergent effects across the supply chain. Upstream mining companies are securing steady profits, while downstream tool and machining industries face severe cost pressures.

The prosperity of upstream companies is evident. Major mining firms like Xiamen Tungsten, Zhangyuan Tungsten, and Xianglu Tungsten have repeatedly revised upward their earnings forecasts for 2025. Particularly, Zhangyuan Tungsten has leveraged supply shortages and increased demand in the raw material market to maximize coordination effects across the entire industry chain, achieving significant increases in revenue and net profit. For resource-holding companies, rising tungsten prices directly translate into higher earnings.

Conversely, the downstream tool industry is experiencing rapid polarization. Large firms, backed by ample capital and production scale, are able to pass on increased costs through higher product prices. However, many mid-sized and small companies are struggling with both capital shortages and inventory deficits. They are forced to cut production or delay management decisions, with some beginning to withdraw from the market.

The situation for tool processing companies is akin to being “sandwiched.” Raw material procurement costs upstream fluctuate daily, with shorter quotation validity periods, causing procurement costs to rise endlessly. Meanwhile, downstream machine manufacturers cannot immediately meet toolmakers’ price increase demands, leaving their cost burdens high.

Structural Factors Driving Tungsten Price Increases

The sustained rise in tungsten prices is underpinned by a significant supply-demand imbalance. Industry voices from Huashui Precision and Xiamen Tungsten share a common understanding—that is, a serious supply-demand mismatch.

In the global tungsten industry chain, supply constraints have become apparent. China, the world’s largest tungsten producer, faces production restrictions due to quota and environmental regulations. Additionally, strategic stockpiling has artificially compressed supply, further tightening the market.

On the demand side, major shifts are occurring. New growth industries such as solar power, AI, and new energy vehicles are dramatically increasing tungsten demand. According to Jianghai Securities, tungsten wire cutting technology used in solar panel manufacturing is rapidly gaining popularity, with market penetration expected to exceed 60% in silicon wafer cutting by 2025. Furthermore, by 2026, the global capacity for the new heterojunction (HJT) solar cell technology is projected to reach 80GW, generating approximately 6,400 tons of new tungsten demand.

This supply-demand gap has profoundly altered market sentiment. Currently, the recycled tungsten market exhibits a “daily price” phenomenon, with prices sometimes soaring more than five times in just a few months. For example, the recovery price of recycled tungsten steel milling cutters was about 200 yuan/kg in March 2025, but now exceeds 1,000 yuan/kg, setting new record highs.

Additionally, frequent price adjustments by industry chain companies amplify bullish market sentiment. Huashui Precision, for instance, has implemented four price increases since December 2025. Price hikes extend from long-term raw material contracts to tool products, even involving international prices in the semiconductor industry, fueling a global upward trend.

Industry Chain Transformation: Innovation as a New Competitive Axis

Amidst the rapid price increases, the industry chain is forced to transform. This process is not merely painful but could serve as a catalyst for qualitative industry change.

Fundamental business model shifts are underway. Many nonferrous metal processing firms, which previously relied on a simple “raw material cost + processing fee” pricing model, find it inadequate to cover tungsten price fluctuations. Industry insiders note that some tool manufacturers recognize that “as raw material costs rise, the value of technological cost reductions becomes more prominent.” The shift from low-price competition to investing in R&D and product sophistication is now irreversible.

Similarly, at a recent investor briefing, Eucoo confirmed this trend, stating, “With continued raw material price increases, the tool industry will face a period of deep adjustment and upgrading.” Downstream customers are increasingly focused on processing efficiency, durability, and stability, favoring companies that excel in technology and service. The industry’s competitive logic is shifting from “price wars” to “value battles,” making this transformation inevitable.

Upstream mining companies are also accelerating this shift. In February, Xiamen Tungsten acquired controlling stakes in Jiujang Dadi Mining Development Co., Ltd. This strategic acquisition aims to increase resource reserves, improve raw material self-sufficiency, and reduce supply chain risks. Resource integration and efficiency improvements are becoming central to upstream growth strategies.

While the surge in tungsten prices causes short-term pain, it also drives the entire industry toward greater technological dependence and value-added competition. This ecosystem restructuring is seen as essential for strengthening long-term competitiveness. Companies that can adapt through cost reduction and technological innovation will be the ones to thrive amid this new wave of demand.