The Tungsten Market Is Warning of an Upcoming War

Tungsten has shifted from an obscure industrial metal to a geopolitical bellwether in this episode of Odd Lots, driven by Bloomberg Opinion columnist David Fickling’s on‑the‑ground reporting about a restarting mine off Tasmania. Fickling traces tungsten’s boom‑and‑bust role back to World War I (mine opened 1917), World War II (reopened 1938) and later conflicts; when war seems likely, investors and militaries bid up supply because tungsten’s density and >3,000°C melting point make it uniquely effective for armor‑piercing rounds and dense shrapnel. Hosts Joe Wisenthal and Tracy Alloway pick up those themes and probe wider uses — roughly 80% of tungsten now goes into tungsten carbide tooling (drill bits, industrial cutting tools), up to ~10% in turbine alloys, with only tiny volumes used in semiconductors or AI chips — and the consequences of concentrated supply.

Fickling emphasizes two linked market failures: geological concentration (China supplies ~80% of global output) and market structure (the tungsten trade is tiny and illiquid, with no forward curve). Those facts make financing non‑Chinese projects difficult even though the absolute capital needs can be small — the Dolphin mine’s A$77 million total cash invested over decades and an A$7 million equity base are tiny next to major defense budgets, yet could supply about 2.5% of global demand if scaled. Price evidence is dramatic: ammonium paratungstate moved from roughly $300/dmtu in 2022 to over $3,000/dmtu by 2026 (one dmtu ≈ 7.93 kg, so ~ $400k/tonne). The conversation converges on policy tradeoffs: Fickling argues for narrowly targeted, medium‑term price security (3–5 years) or strategic stockpiles for genuinely critical minerals (tungsten, some rare earths, gallium, germanium) to make mines bankable, while warning that unfocused programs (the broadly defined US “Project Vault,” ~$12bn) risk subsidizing common commodities rather than true chokepoints. Hosts and guest agree the technical and financial solutions exist, but political will, clear criteria, and focused support are required to avoid reactive, expensive scramble cycles the next time geopolitical tensions spike.