The Price Reality: How High Are We Talking?
To appreciate the current market, we must look at the numbers. By late January 2026, just before the holiday shutdowns, tungsten carbide powder had already crossed the RMB 1,400/kg mark, representing a staggering 34.6% increase from the beginning of the year alone . More recent spot prices from late February indicate the trend is accelerating, with quotes reaching RMB 1,630/kg for standard grades .
To understand the current market, we need to look at the numbers. By late January 2026, just before the holiday shutdowns, tungsten carbide powder had already crossed the RMB 1,400/kg mark, representing a staggering 34.6% increase from the beginning of the year alone . More recent spot prices from late February indicate the trend is accelerating, with quotes reaching RMB 1,630/kg for standard grades .
This is not a short-term spike. Looking at the bigger picture, prices have increased nearly five-fold over the past year . What was once a manageable input cost for tool manufacturers has become a strategic board-level issue, fundamentally altering procurement strategies and market dynamics .
Supply Side: The Perfect Storm of Constraints
The primary driver of high tungsten prices is an undeniable supply crunch. Analysts at BMO Capital Markets have warned that the world has "sleepwalked" into a tungsten shortage, and there is no quick fix in sight .
1. China's Dominance and Policy Shift
China accounts for roughly 75-80% of the global tungsten supply . In early 2025, Beijing implemented export controls on key tungsten products, including ammonium paratungstate (APT), oxides, and crucially, tungsten carbide. This policy move, combined with stricter environmental enforcement and reduced mining quotas—a 6.45% cut in the first batch of 2025 concentrate quotas—has significantly tightened the flow of material to the international market . Consequently, exports of materials like APT have plummeted, with some months in late 2025 seeing near-zero volumes .
2. Depleted Global Inventories
Years of underinvestment in new mining projects outside of China have left the world dependent on a supply chain that is now tightening. With global inventories critically low and another supply deficit projected for 2026, the market remains structurally undersupplied .
Demand Side: Why Consumption Isn't Slowing
If supply were the only factor, demand destruction might eventually bring prices down. However, tungsten carbide demand remains remarkably resilient, anchored by several high-growth sectors.
lHigh-Value Manufacturing: In sectors like aerospace, defense, and automotive, tungsten is virtually irreplaceable for precision machining. Approximately 58% of metal-cutting operations now rely on carbide tools for their durability . This creates a baseline demand that is insensitive to price fluctuations in the short term.
lThe NEV and Electronics Boom: The shift to electric vehicles and the growth of AI-driven electronics are creating new demand vectors. For instance, the photovoltaic industry's adoption of tungsten carbide wire for slicing silicon wafers has surged, with penetration rates jumping from 20% to 60% in 2025 alone . Similarly, the need for precision micro-drills for AI PCBs is pushing demand for high-quality tungsten carbide powder .
Market Impact: Winners and Losers in the Cutting Tool Industry
The sustained high prices are reshaping the cemented carbide industry, acting as a powerful accelerator for market consolidation .
lThe Squeeze on Small Players: The capital required to maintain inventory levels has quadrupled. A business that once needed $1 million in working capital now requires $4 million to operate at the same scale . This has forced many smaller manufacturers to reduce orders or shut down entirely, unable to secure the raw materials needed to fulfill contracts.
lThe Strength of Large Manufacturers: Conversely, leading tungsten carbide manufacturers and tooling companies like Oke Precision and Sharpe Tools have turned this challenge into an opportunity. With strong balance sheets, they stockpiled material in advance, securing lower-cost inventory that insulates their margins . They have also successfully passed on cost increases to customers through multiple pricing adjustments, leading to forecast-beating profit growth . Order backlogs have stretched from one month to as long as three months, indicating strong downstream demand that accepts the new pricing reality .
Outlook: The Cure for High Prices is High Prices
Looking ahead to the rest of 2026 and beyond, market analysts suggest that a return to the old normal is unlikely. The fundamental dynamics are too strong.
As the BMO analysts succinctly put it, "The cure for high prices is high prices" . In the tungsten market, this means that current elevated levels are necessary to incentivize investment in new mining projects and recycling infrastructure outside of China. However, these are long-term solutions. New mines take years to develop, and while recycling rates are improving—with about 55% of scrap holding recoverable value—it cannot immediately fill the supply gap .
For now, the message for buyers is clear: Tungsten carbide powder prices are expected to remain high throughout 2026. Strategic procurement, long-term contracts with reliable suppliers, and a focus on carbide recycling will be essential tools for navigating this new era of expensive tungsten.