Paris: Prices for tungsten, an ultra-hard metal that is key for the defence industry, have soared to record highs since China restricted exports in mid-2025.
The restrictions by the world's top producer of the metal have become a major cause for concern among manufacturers now forced to diversify their supply sources.
The Chicago Mercantile Exchange (CME Group), one of the world's leading derivatives exchanges, said Monday it will launch a dedicated futures market to meet growing demand for the metal by early next year to increase price transparency.
What is tungsten used for?
Tungsten has the highest known melting point of any metal at 3,422 Celsius (6,192 Fahrenheit) and is exceptionally hard, almost as hard as diamond, with a density "equivalent to that of gold," according to a CyclOpe report on raw materials.
Those properties make it an excellent material for drilling or producing other metals and hard materials, for example in the automotive or aerospace industries, or in mining.
It also enables the production of alloys which are highly resistant, notably to corrosion and heat, a boon for sectors such as aerospace as well as defence.
China's place
Global production of tungsten is estimated 85,000 tonnes in 2025, according to a US government estimate, a fraction of the figure for metals like copper or nickel.
CME Group estimates the value of the tungsten market at more than $20 billion dollars as at current market values of around $230 a kilo.
As is the case for rare earths, tungsten is another industry critical area where China enjoys a dominant position with some 79 percent of global production.
Second place Vietnam at 3.5 percent, according to CyclOpe.
A US government estimate says China holds around 53 percent of global reserves.
It is also well out in front when it comes to transforming raw tungsten into the industrial metal, accounting for some 86 percent, according to Ofremi, the French observatory of mineral resources for industrial sectors.
In April of last year, amid international trade tensions, Beijing tightened export controls on the metal and cut domestic mining quotes.
That constricted supplies and sent global prices soaring from less than $500 to more than $3,000 per metric tonne.
Consequences
Last April, Nicolas Dufourcq, CEO of France's public investment bank Bpifrance, warned of possible repercussions for French manufacturers.
"Tungsten is the key metal used in metal-cutting tools, which must be replaced regularly. Over the past nine months, we have therefore been using our old tools," he added
To manufacturers wishing to replace these tools, "the Chinese say, 'you're going to buy Chinese cutting tools,'" Dufourcq added.
Race on for other sources
The rest of the world is straining to find alternative supply sources.
Among projects for the extraction, refining, or recycling of strategic minerals supported by the European Union, five involve tungsten, including two mines.
They are the El Moto project led by Abenojar Tungsten in Spain, where production is scheduled to begin in early 2029, and the Borralha project led by Mineralia in Portugal.
France has long produced tungsten in the southern region of Ariege, at the former Salau mine, which some would like to reopen.
In June, France's main employer federation, Medef, said re-opening the facility was a question of national sovereignty.
Other projects are being launched or revived around the globe, including the Dolphin Mine on King Island, a small Australian island between Melbourne and Tasmania.
Launched in 1917, it ceased operations in 1992 as a result of prices long driven down by Chinese production.
Today, "the main challenge is ensuring security of supply outside of China. This makes our project an important part of the equation," said Kevin Pallas, head of Group 6 Metals, which owns the mine.
Yet mining production alone will not be sufficient to cut dependence on Chinese refining.
'War' metal?
Given its usefulness in military hardware tungsten is sometimes known as a "war metal".
Its characteristics make it a useful component for armour-piercing munitions.
But it has many other uses.
Pallas said that only some 13 percent of annual production is linked to military applications.
According to experts behind the CyclOpe report, an annual reference for global raw materials and commodity markets, demand is linked to "global industrial dynamics, particularly in the mining and construction sectors, energy and defence."
And those experts see precisely those sectors as enjoying "high growth between now and 2030."