China Controls 35% Tungsten Resources Coming into American Market

Like many of the 35 minerals and metals deemed critical to the United States, China controls the new tungsten coming into global markets.

“World tungsten supply was dominated by production in China and exports from China," USGS penned in its annual report, Mineral Commodity Summaries 2019.

At around 67 million metric tons of tungsten, the Middle Kingdom accounted for roughly 82 percent of the global titanium supply during 2018. The world's second largest tungsten supplier, Vietnam, produced 6 million metric tons last year. Russia, Austria and the United Kingdom round out the world's top tungsten sources.

In recent years, China has put limitations on tungsten mining and exports of this durable metal, causing concerns about global supply of this metal.

“China's government regulated its tungsten industry by limiting the number of mining and export licenses, imposing quotas on concentrate production, and placing constraints on mining and processing," the USGS wrote.

This effort has put constraints on the availability of tungsten concentrates in China.

While China touts stronger environmental safeguards as one of the primary reasons for restricting the mining of tungsten, as well as a host of other critical metals, many analysts believes the government's motives have more to do with consolidating mining to the country's largest producers and bolstering prices.

Whatever the impetus, China's production and export restrictions resulted in sharp increases in the price. During 2018, tungsten averaged US$330 per metric ton, a 35 percent increase over the US$245 per metric ton average the year before.

China also happens to be the largest consumer of tungsten, making it a major influencer on the demand side of the price equation.

“Beginning in 2017, economic conditions improved in China and elsewhere, resulting in increased tungsten consumption," USGS penned in its 2019 commodity summaries. "In early to mid-2018, prices of tungsten concentrate and downstream tungsten materials trended upward and then stabilized or decreased during the remainder of the year."

The United States consumed roughly US$900 million worth of tungsten during 2018, more than half of which came from foreign sources. China, America's largest source of tungsten products, accounted for 32 percent of imports. Bolivia (9 percent), Germany (9 percent) and Canada (8 percent) were also contributors to U.S. needs for this durable metal.

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