CME Group is set to roll out tungsten futures contracts in the first half of 2027, which could help companies and traders manage price risk on a crucial metal as restrictions from China and increasing defense-related use have tightened its supply around the world.
The contract, which will need to be approved by regulators, will be offered on COMEX as a cash-settled contract based on the Fastmarkets assessment for ammonium paratungstate (APT), an intermediate form of tungsten valued on a duty-unpaid cost-insurance and freight basis at Rotterdam and Baltimore. There will be no physical delivery.
Its rollout could create a forward pricing benchmark in a market dominated by spot transactions. Tungsten is used to make jet engines, military ammunition, and semiconductor equipment and is therefore crucial for the US and other nations.
CME estimates the annual production of tungsten worldwide is about 85,000 to 95,000 metric tons. The US, European Union, Japan, and India have classified the metal as a critical mineral.
“Clients are looking to hedge their exposure and improve price transparency,” Jin Hennig, global head of metals at CME, said in the exchange statement.
China restrictions fuel price surge
Tungsten price jumped in 2025 as Beijing increased controls over exports of strategic metals and lowered domestic quotas for their extraction.
According to a Fastmarkets report, prices of Chinese tungsten products, including APT, concentrate and ferrotungsten, increased by more than 200% in 2025. Its Chinese APT price assessment went up from 335-345 per metric tonne at the beginning of 2025 to 1,050-1,115 by the end of the year.
Export licenses were imposed on the export of tungsten and other strategic materials in China on February 4, 2025. This regulation requires exporters to provide information on export volumes and uses of these metals. Beijing lowered its tungsten mining quota for the third consecutive year.
The United States has no tungsten mining industry and is dependent on imports and recycling. China contributed 27% to U.S. tungsten imports between 2020 and 2023, according to data from the US Geological Survey provided by Fastmarkets.
Defense demand adds pressure
More funding is going into replenishing stocks of strategic minerals and improving domestic supply chains.
Elmet Technologies, a subsidiary of the Elmet Group, won a multi-year, indefinite delivery contract valued at up to $2 billion from the Defense Logistics Agency to replenish the National Defense Stockpile, according to Reuters. The contract includes an initial commitment of $150 million.
In a separate deal, the Department of War in the United States allocated $450 million to Elmet that would facilitate production of tungsten. Elmet produces tungsten that is used in the Patriot, Javelin, THAAD, and the F-35.
The Elmet Group announced that it would postpone shipments of stockpiles until more mining, offtake arrangements, and expansion of processing capacity take place to prevent existing manufacturers from being deprived of material.
CME targets tungsten price volatility
Though the CME contract would allow traders to hedge price fluctuations and make their planning easy, it won’t address the shortage issues. The development of new mines and processing plants takes years to materialize and can be anywhere between three and five years away from becoming a reality, as per an industry estimate quoted by Fastmarkets.
This move, however, will benefit Western manufacturers in making budgeting and risk assessment easier until the time new capacity comes online.
The announcement of this contract has made clear how geopolitics and other factors have become critical in determining the future of commodity prices. Investors looking at the risks of supply chains in industrial metals and other industries, including cryptos, have come to recognize this factor as well.
Crypto markets face an indirect macro risk
The tungsten futures introduced by CME pose an input cost risk for supply chains that could also impact crypto markets. The possibility of geopolitically induced constraints and defense spending on the rise can help keep costs for inputs to industries high.
If China continues with its export controls on metals and Western countries start stockpiling, the cost effect may prove hard for central banks trying to lower inflation. In case commodity prices start feeding into inflation expectations, the markets will cut their rate reduction forecasts and, as a result, raise bond yields, making the cost of non-income-producing assets like Bitcoin more expensive.
There is no guaranteed link between the two processes. Tungsten is a relatively small market and a big jump in prices on its own cannot impact either U.S. inflation or Bitcoin directly. What crypto investors should watch out for is the bigger picture of the constraint, including energy, industrial metals, and defense-related goods.
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