(The opinions expressed here are those of the author, a

columnist for Reuters)

By Andy Home

LONDON, March 23 (Reuters) - The U.S. and Israel have

used thousands of munitions in their air campaign against Iran.

Most, if not all of them, contain tungsten - a super-hard metal

that allows missiles to penetrate armour or underground bunkers.

Unlike a tungsten carbide drill bit, which can be recycled,

tungsten used in munitions is consumed on detonation. It is gone

for good.

The Iran war, coming on top of Ukraine - now in its fifth

year - is draining stocks not just of missiles but of the

metals that make them so lethally efficient.

Replacing what has been used will be challenging. The

tungsten market was already struggling before China tightened

its export controls in February 2025 in response to U.S.

tariffs. Now it is in crisis.

TUNGSTEN ROCKET

Tungsten prices have gone parabolic ever since. The

Rotterdam market for ammonium paratungstate (APT), an

intermediate product used to make tungsten metal, has surged

from under $400 per metric ton a year ago to over $2,200,

according to Chinese price reporting agency Shanghai Metals

Market.

That makes tungsten one of the strongest-performing

commodities in recent months, outpacing gains in copper, gold

and oil.

According to consultancy Project Blue, citing U.S.

Geological Survey data, tungsten products are now trading at

their highest level in at least 90 years.

China accounts for around 80% of global mined production,

according to the USGS, and is leveraging its dominance of

tungsten supply just as it is doing in the rare earths sector.

Tungsten exports have fallen by nearly 40% since the new

controls were implemented, according to William Parry-Jones,

founder of Wolfram Advisory, a tungsten consultancy.

There is a second problem beyond the export curbs. Project

Blue estimates that China's mined production fell 10%

year-on-year to 61,000 tons in 2025, due to lower government

quotas and environmental clampdowns on smaller miners.

More tungsten is also being absorbed by China's own domestic

market. Export volumes from the world's largest producer would

likely be falling even without the new restrictions.

PRIMING THE PIPELINE

Western supply is improving, albeit from a low base.

Non-Chinese production rose by 20% year-on-year to 19,000 tons

last year, Project Blue estimates.

That was largely down to the start of the Boguty mine in

Kazakhstan, a country that is emerging as a potential key link

in a non-Chinese tungsten supply chain.

U.S. mining investment company Cove Capital signed a deal in

November to lead development of another large tungsten deposit

in Kazakhstan, backed by $900 million from the U.S.

Export-Import Bank.

The Pentagon sought fresh supplies of 13 critical minerals -

including tungsten - from industry partners the day before U.S.

and Israeli strikes on Iran began.

Federal awards have gone to Guardian Metal Resources ( GMTL/WI )

to fund studies into the Pilot Mountain deposit in

Nevada and to Amermin for enhanced recycling capacity.

The problem is that core components of this expanding

portfolio are still years away from actually producing metal.

CIVILIAN CASUALTIES

That sets the stage for increased competition between

defence and civilian sectors for available supply.

The defence sector accounted for around 10% of global

consumption last year, according to Project Blue.

That ratio is only going to rise as Western countries,

particularly the U.S., look to rebuild stocks of munitions after

the drain caused by the war in Ukraine and now the

missile-intensive hostilities in the Gulf.

Military buyers will always be able to outbid civilian

buyers, which could spell trouble ahead for high-end

manufacturers using tungsten in semiconductors, printed circuit

boards and solar panels.

Electronics is a fast-growing component of tungsten demand,

complementing the metal's usage in cemented carbide tools in the

construction, mining and oil and gas sectors.

MINERALS BOTTLENECK

Tungsten is only one of many critical minerals used in

munitions.

The Tomahawk cruise missile, for example, is thought to

contain up to 18 critical metals across its guidance,

electronics and warhead systems, although detailed information

is classified.

Amanda van Dyke, founder of the Critical Minerals Hub,

argues that "missile math is mineral math" and that the current

Gulf conflict amounts to a massive "mineral sink."

But most of the minerals in question are currently produced

in China.

The Iran war will reinforce the West's drive for greater

mineral autonomy. But building multiple new supply chains from

mine to processing to product is going to take time.

Time the West may no longer have.

(The opinions expressed here are those of Andy Home, a

columnist for Reuters.)

Enjoying this column? Check out Reuters Open Interest

(ROI), your essential new source for global financial

commentary. Follow ROI on LinkedIn, and X.

And listen to the Morning Bid daily podcast on Apple, Spotify,

or the Reuters app. Subscribe to hear Reuters journalists

discuss the biggest news in markets and finance seven days a

week.

(Writing by Andy Home;

Editing by Marguerita Choy)