Major Chinese Tungsten Producers Rally as Beijing Imposes Critical Mineral Export Controls
Chinese tungsten producers experienced a surge in stock prices on Wednesday as markets responded to Beijing's newly implemented export controls on critical minerals.
Following the initiation of fresh U.S. tariffs on Chinese goods on Tuesday, China announced restrictions on exports of tungsten, indium, bismuth, tellurium, and molybdenum, citing national security concerns.
Key industry players, including Xiamen Tungsten, China Tungsten and High-tech Materials, Chongyi Zhangyuan Tungsten, and CMOC, witnessed gains of over 3% and 1%, respectively.
Similar export curbs in the past, such as those implemented in August 2023, have led to price increases due to the amplified importance of these metals. Chinese exporters may also benefit from anticipated overseas price rallies upon securing export licenses.
Tungsten, an ultra-hard metal second only to diamonds in strength, is crucial in manufacturing products like artillery shells, armor plating, and cutting tools. China's dominance in global tungsten supply exceeded 80% in 2023 (USGS).
While tungsten resources are found outside China, analysts and traders emphasize the scarcity of non-Chinese alternatives for specialized tungsten products utilized in the aerospace and defense sectors.
"Export controls on APT (ammonium paratungstate) and tungsten carbide could be the most impactful, as aerospace and defense applications have limited alternatives to tungsten," said Argus analyst Sian Morris.
"Russia was a significant supplier of tungsten products, but China's market share has increased since the onset of the conflict in Ukraine," he added.