Recent reports confirm that China's tungsten exports to Japan have effectively ground to a halt, sending shockwaves through Japan's manufacturing sector.
This situation stems directly from a measure by China's Ministry of Commerce (MOFCOM) in February 2026. The ministry announced export controls on 'dual-use' items, which are materials that can be used for both civilian and military purposes. The explicit target was Japanese entities with potential links to military or defense-industrial end-uses. This policy decision became the legal basis for restricting the flow of tungsten, a critical industrial metal, to Japan.
Consequently, the impact on the market was immediate and severe. The price of Ammonium Paratungstate (APT), the global benchmark for tungsten, skyrocketed. Having hovered around $320 per metric ton unit (MTU) in 2024, it jumped to approximately $1,100 in January 2026 and was estimated to be in the $1,750-$1,850 range by February. This price surge directly translates to higher costs for industries that rely heavily on tungsten, such as manufacturers of cutting tools, aerospace components, and semiconductor processing parts.
The causal chain leading to this crisis is clear. First, the February MOFCOM announcement laid the groundwork. Second, by April, Japanese mid-sized companies were already reporting procurement difficulties, and the first major corporate responses emerged, including Sumitomo Electric's investment plan. Third, news reports in late May confirmed that the export ban had expanded from raw materials to processed goods like tungsten carbide and powder, effectively shutting down the supply chain.
In response, Japanese industry is moving on two fronts. Short-term, companies like Mitsubishi Materials announced drastic price hikes of up to 300% to pass on the soaring material costs. Long-term, there's a strategic pivot towards supply chain resilience. Sumitomo Electric, for example, is investing ¥15.9 billion to expand domestic tungsten production and recycling capabilities by 50%. This reflects a broader effort to reduce the structural dependency on China, which controls about 80% of the world's tungsten supply.
Ultimately, this episode is more than just a commodity price story. It underscores how strategic materials have become a key instrument in geopolitical strategy. For Japan, it's a stark reminder of its supply chain vulnerabilities and has accelerated the national push for economic security by diversifying sources and bolstering domestic production.
- Glossary -
- Tungsten: A very hard, dense metal essential for high-performance applications like cutting tools, defense and aerospace components, and semiconductor manufacturing equipment.
- Dual-Use: Refers to goods, software, and technology that can be used for both civilian and military applications.
- APT (Ammonium Paratungstate): An intermediate tungsten product traded globally. Its price serves as a key benchmark for the entire tungsten market.