The first quarter of 2026 was a truly exceptional period for China's tungsten industry.
Listed tungsten companies saw their profits skyrocket, with some reporting year-over-year net profit growth of over 2,900%. This wasn't a random event but the result of a powerful convergence of three key factors: tight supply, new demand, and supportive policy. Let's break down how this happened.
First, the supply side has been deliberately tightened by Chinese authorities. China, which dominates global tungsten production, uses a mining quota system to control output. The quota for 2025 was already reduced, and the government further consolidated its control by restricting export licenses to a select few state-owned enterprises in late 2025. This created a bottleneck, limiting the amount of tungsten available to the global market and giving Chinese producers significant pricing power.
Second, while supply was being constrained, a new wave of demand emerged. The most significant driver is the photovoltaic (PV) industry. Tungsten-core diamond wire is rapidly replacing traditional materials for cutting silicon wafers to make solar panels. This new application created a substantial new source of demand. On top of this, structural demand from the semiconductor industry (for tungsten hexafluoride, WF₆) and the defense sector (for its high-strength, heat-resistant properties) remains robust.
This classic squeeze of tight supply and rising demand led to a dramatic price surge. The international benchmark price for Ammonium Paratungstate (APT) jumped from around $1,800/mtu in mid-February to over $3,000/mtu by late April. This price explosion directly benefited upstream companies—the miners and refiners. They were able to pass on higher costs and capture massive profit margins, which is clearly reflected in their first-quarter financial results.
In conclusion, the record profits in early 2026 signal a structural shift in the tungsten market. The combination of policy-driven supply scarcity and new, high-growth demand drivers suggests that while prices may see short-term adjustments, a strong price floor has been established for the foreseeable future.
- APT (Ammonium Paratungstate): A key intermediate tungsten chemical compound. Its price is a widely used benchmark for the global tungsten market.
- Upstream: Refers to the initial stages of the production process, which in this case includes mining tungsten ore and refining it into primary products.
- PV (Photovoltaics): The technology and research field related to the application of solar cells for energy by converting sunlight directly into electricity.