What caused the sharp increase in tungsten prices in 2025?

The sharp increase in tungsten prices in 2025 stemmed from a perfect storm of supply - side tightening, demand - side surge, geopolitical and strategic factors, and market sentiment amplification, with supply - demand imbalance being the core driver. Here are the details:

Core Driver 1: Intensified Supply - side Contraction

Tightened mining quotas: China, which accounts for over 80% of the global tungsten output, set the first - batch tungsten ore (65% WO₃) mining quota at 58,000 tons in 2025, a year - on - year decrease of 6.45% (4,000 tons less than that in 2024). Quotas in major producing areas like Jiangxi and Hunan were reduced by 8% - 10%. Meanwhile, the tightening of control made over - mining almost impossible.

Stricter export control: In February 2025, China implemented a "one permit per order" export control on 25 tungsten products such as ammonium paratungstate (APT) and tungsten oxide. This led to a significant drop in export volume, a sharp rise in overseas prices, and a domestic - foreign price gap of more than 100,000 yuan/ton.

Environmental protection and cost pressure: The upgrading of central environmental protection inspections resulted in the operating rate of domestic mines dropping to less than 35%. Also, the decreasing grade of tungsten ore (down to 0.28% in 2024), rising mining and energy costs, as well as equipment aging, further curbed the supply capacity of mines.

Low inventory and insufficient overseas supply: The social inventory of domestic tungsten concentrate was less than 8,000 tons, and London tungsten futures inventory hit a three - year low of 1,500 tons. Overseas projects were delayed due to capital and technical issues, failing to make up for the supply gap in a short time.

Core Driver 2: Explosive Growth in Demand

Booming new energy demand: The penetration rate of photovoltaic tungsten wires soared from 20% in 2024 to 40% in 2025, with the demand for tungsten wires expected to exceed 4,500 tons globally. The consumption of tungsten in lithium - ion batteries rose by 22% year - on - year to 1,500 tons as tungsten was added to lithium - ion battery cathodes to enhance energy density.

Strong demand from strategic sectors: Tungsten, listed as an "extremely important" strategic resource by the EU's Critical Raw Materials Act, saw surging demand from the military industry for products like armor - piercing projectiles and high - precision components. Traditional industries such as hard alloy tools and PCB drills also maintained stable demand.

Rising demand for recycled tungsten: The price of recycled tungsten rose by 30% within the year, and the shortage of primary resources made the demand for recycled tungsten increase, which in turn pushed up the overall market price.

Core Driver 3: Amplification by Market and Cost Factors

Cost - push effect: The continuous increase in mining, energy, labor, and transportation costs led to the mining cost of tungsten concentrate exceeding 100,000 yuan/ton, which was transmitted to the whole industrial chain, driving up the prices of tungsten products at all levels.

Market sentiment and capital speculation: Bullish expectations on the market, the reluctance of holders to sell, and the influx of hot money into the futures market amplified price fluctuations. On August 20, the single - day turnover of the tungsten futures market reached 1.618 billion yuan.

Low inventory support: The domestic social inventory of tungsten concentrate was less than 8,000 tons, and the inventory of tungsten powder fell below 500 tons. The tight inventory pattern strongly supported the continuous rise of prices.