American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
While global attention remains fixed on geopolitical flashpoints and energy market volatility, a quieter but equally critical crisis is deepening within the industrial heartlands. Tungsten, often described as the “teeth of industry,” has seen prices quintuple over the past year, pushing the market toward a severe shortage cliff shaped by prolonged underinvestment and tightening supply from China.
In a note published Monday, BMO Global Commodities Research analysts George Heppel and Helen Amos warned that the world has “sleepwalked” into a tungsten crunch. The crisis is rooted in persistent ore grade decline, intensifying environmental restrictions, and a dearth of new mining investment. With global inventories critically low and another supply deficit forecast for 2026, analysts expect market tightness to persist.
Though it rarely captures public attention, tungsten is an indispensable cornerstone of heavy industry. Boasting the highest melting point of any metal at 3,422°C and a density of 19.3 g/cm³—comparable to gold—tungsten and its carbide form are virtually irreplaceable in machinery manufacturing, drilling equipment, and defense applications. In the military sector, it is the material of choice for armor-piercing ammunition, offering superior performance without the environmental and health risks associated with depleted uranium alternatives. From hypersonic vehicle components to semiconductor microcircuits, tungsten’s presence is ubiquitous.
China holds an unassailable position in the global tungsten market, accounting for approximately 75% of worldwide mine production. However, output has stagnated in recent years amid declining ore grades, tighter environmental controls, and Beijing’s imposition of export restrictions on dual-use items. According to U.S. Geological Survey data, China controls over 80% of annual global production and 58% of reserves—a level of market concentration that represents a significant strategic vulnerability.
By early 2026, Chinese tungsten exports had plummeted. Fastmarkets data shows that shipments of certain products, such as Ammonium Paratungstate (APT), fell to zero in late 2025. This triggered an explosive price rally: APT prices broke out of their long-term average of approximately $300 per tonne in 2025 and now trade at around $1,775 per tonne.
BMO expects 2026 to be a pivotal year. With inventories depleted and supply growth constrained, the market appears headed for another deficit—a dynamic likely to keep prices elevated.
The report outlines five potential mechanisms that could eventually rebalance the market, though none offers a quick fix:
In the near term, BMO believes the market will balance through a combination of artisanal supply growth and some demand destruction. However, this adjustment will be insufficient to restore comfortable inventory levels. Over the longer term, analysts stress that sustained high prices will be needed to incentivize new mine development.
“The cure for high prices is high prices,” the analysts wrote, adding that meaningful investment in mined supply will likely occur only at price levels well above historical norms.
With reindustrialization and defense spending accelerating in the U.S. and elsewhere, tungsten demand is set to grow. BMO expects the metal’s supply challenges to keep it firmly in the spotlight of critical minerals strategies for years to come. As globalized supply chains fracture under the weight of great-power competition, the world stands at a critical crossroads. For nations like the United States—which has not commercially mined tungsten since 2015 and relies entirely on imports and scrap recycling to meet demand—this reality is particularly stark.
Against this backdrop, efforts by companies such as Canadian Securities Exchange-listed American Tungsten Corp. (CSE: TUNG, OTCQB: DEMRF) to restart historic mines like the IMA project in Idaho have taken on national security significance that transcends commercial returns. But these are long-term solutions to an immediate problem: global markets are being forced to adapt to a new era of higher prices, more fragile supply, and deep uncertainty.
