Tungsten Prices Surge 500% with 2026 Supply Deficit Looming
Tungsten prices have climbed roughly 500% over the past year as declining ore grades, tougher environmental rules and export limits from China have driven global inventories to critically low levels. BMO forecasts another supply deficit in 2026, predicting tight market conditions will persist even if prices rise further.
1. Price Surge and Market Drivers
Tungsten prices have jumped about 500% in the past year as declining ore grades, strengthened environmental regulations and chronic underinvestment in new capacity have collided with export constraints from China to push global inventories down to critically low levels.
2. Industrial and Defense Importance
Tungsten’s exceptional heat tolerance, wear resistance and high density make it vital for cutting tools, drilling operations and armor-piercing munitions, creating strong, inelastic demand that is difficult to substitute.
3. Forecasted Supply Deficit
BMO projects a continued supply deficit through 2026 even if prices increase sharply, as production expansions face lengthy permitting, financing and construction timelines.
4. Paths to Market Rebalance
BMO outlines five imperfect solutions: modest expansion of Chinese mine output, development of projects outside China, artisanal mining growth, increased recycling and potential demand destruction if prices stay elevated.