Here's a fun game for commodity watchers: look away from the shiny stuff. While investors have been fixated on gold's run and copper's role in the energy transition, a far more dramatic move has been happening under the radar. Tungsten prices have quietly climbed about 500% over the past year. And according to analysts, the factors behind this repricing aren't going anywhere soon.
In a note this week, BMO Global Commodities Research delivered a stark warning: the market has "sleepwalked" into a supply crunch. Analysts George Heppe and Helen Amos point to a perfect storm of declining ore grades, tightening environmental rules, and years of chronic underinvestment in new mining capacity. This has all collided with export constraints from China, the world's dominant producer. The result? Global inventories are critically low.
The kicker? BMO is forecasting another supply deficit for 2026. That suggests this tightness—and the high prices needed to reflect it—is likely to stick around for a while.
The Invisible Workhorse
Tungsten is the ultimate background player. It rarely grabs headlines, which is ironic given how fundamentally important it is. It boasts the highest melting point of any metal and has a density similar to gold. In its carbide form, it's exceptionally wear-resistant, making it absolutely vital for industrial cutting, drilling, and high-performance machining.
Its role doesn't stop at the factory floor. Tungsten is indispensable for defense, where its density and strength make it the material of choice for armor-piercing munitions. The tricky part is substitution; very few metals combine extreme heat tolerance, hardness, and density like tungsten does.
This critical industrial importance is now slamming into a problematic supply profile. As with many critical metals, China is the center of the universe, accounting for roughly three-quarters of both production and downstream processing. Since Beijing has tightened environmental standards and restricted exports, shipments of key intermediate materials have plummeted, squeezing the rest of the world.
Five Imperfect Solutions
So, how does the market rebalance? BMO outlines five possible pathways, each with its own caveats. First, Chinese mine supply could expand, but grade depletion and regulatory hurdles limit how fast that can happen. Second, projects outside China are moving forward, but the long timelines for permitting, financing, and construction mean meaningful new output is years away.
Third, artisanal mining could ramp up in response to higher prices, but it represents only a small slice of global supply. Fourth, recycling—especially if China commits to it—could help, but that requires new investment and time. Finally, demand could theoretically be destroyed by high prices, but that's challenging given tungsten's unique and often irreplaceable properties.
The Only Cure
For now, the heavy lifting will likely be done by price. "The cure for high prices is high prices," the BMO analysts wrote, echoing the mantra of legendary natural resource investor Rick Rule.
Their argument is that sustained elevated prices are the only reliable mechanism to finally incentivize the massive capital spending needed to develop new mines and processing plants. And there are already early signs the market message is being received.
In Nevada, ASX-listed Viking Mines has highlighted high-grade intercepts at its Linka project, including near-surface zones approaching 1% WO₃ over meaningful widths. Up in Manitoba, Canada's ONGold Resources Ltd. ONGold Resources Ltd. (ONGRF) is re-sampling historical core at its Monument Bay gold-tungsten project. Earlier drilling there returned intervals like 17.4 meters grading 0.51% WO₃.
It's a classic commodity story playing out in a forgotten corner of the market. When something is essential but has been ignored for too long, the reckoning can be swift and severe. For tungsten, that reckoning appears to be well underway.
