Why are Tungsten prices surging amidst the Middle East War?

Prices of tungsten has climbed sharply in recent weeks, hitting a record high of over $3,000 late last week, marking a surge of well over 50% for the month and more than tripling in price since late December.

With over 80% of production concentrated in China, the Iran war is squeezing a global commodities market already pressured by China’s export controls and stockpiling efforts. The surge indicates how ripple effects from the Middle East conflict could end up restricting production of the semiconductors that power artificial intelligence advances. This is because tungsten creates the electrical connection in the core of a semiconductor chip.

Tungsten is widely classified as a critical mineral by the U.S., UK, and EU due to its high economic importance and significant supply chain risk. Its unmatched hardness and high melting point make it essential for defense, aerospace, and specialized industrial tools.

Looking ahead, with restricted Chinese exports and limited near-term new supply, this volatility is widely expected to persist throughout 2026. Substitution remains nearly impossible for most industrial uses, and recycling cannot scale sufficiently in the short term. New mine developments remain years away from entering supply chains.