China plans to restrict exports of a critical metal. But the market isn't that worried
BEIJING — China will start limiting exports of critical metal tungsten this weekend, just as alternatives to Chinese suppliers of the metal are reopening.
It's a reversal of past decades, during which, according to analysts, Chinese businesses poured cheap tungsten into the global market to put competitors out of business — eventually controlling 80% of the supply chain, according to Argus. Tungsten is an extremely hard metal used in weapons and semiconductors.
As part of new rules limiting exports of «dual use» goods — which can be used for military or civilian purposes — China's Ministry of Commerce earlier this month released a list indicating that businesses wanting to export a range of tungsten and critical mineral products would need to apply for licenses. The latest measures will take effect Dec. 1.
The move comes as escalating U.S.-China tensions boost demand for non-China tungsten. The U.S. Defense Department has banned its contractors from buying China-mined tungsten starting Jan. 1, 2027.
«It's a bit late for the Chinese on tungsten,» said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.
«Everybody needs more tungsten. That's the message out there right now,» he said. «The thing that'll prompt more tungsten is not a Chinese ban. It's a Chinese ban causing [it to become more] profitable to mine tungsten.»
Ecclestone pointed out that tungsten prices have not reacted much to China's announcement. For mining the metal to be significantly profitable, he estimates prices would need to trade $50 higher than their current price of around $335 — measured by the industry in per metric ton units of ammonium para tungstate, in which one metric ton unit is 10 kilograms.
Higher prices in the
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