Each scenario has its own raw or rare reference material. While in the past few months the rare materials that were most popular were those used for create batteries and microchips, as the war progresses they are other metals which operators need, but which are suffering from the lack of supply and which therefore show asoaring prices, as the tungsten e aluminum for example. Other industrial metals listed on the London Metal Exchange (LME) showed mixed trends, with copper in decline by 0,3% and the nickel on the rise 0,3%.
Tungsten in high demand for weapons production due to its extremely high density
Il tungsten, metal used in weapons production and semiconductors is now at the center of geopolitical tensions, as the restrictions on Chinese exports , growing military demand have reduced the supply, pushing prices to record levels. Experts say it is a high-quality material very high density, a key component in drilling equipment and in highly armor-piercing weapons.
Its value is more than doubled this year, according to Fastmarkets' European benchmark Apt index. At $2.250 per tonne, prices have risen 557% since Beijing added some tungsten products to its export control list in February last year, while the trade dispute with the United States was ongoing. China holds the largest tungsten reserves and, according to the U.S. Geological Survey, accounted for 79% of the 85.000 metric tons mined last year. According to Project Blue, a London-based research and consulting firm specializing in critical minerals and supply chains for the energy transition, Chinese shipments of restricted tungsten products are decreased by about 40% last year.
But in recent weeks prices have further pushed on the accelerator, as buyers are running out of supplies and the conflict in the Middle East is sharpening attention on the demand for war material. Earlier this month, Trump had said that the major armaments manufacturers Americans have agreed to increase the production of some weapons of 'excellent class'.
Tungsten consumption in the military field, including use in helicopters, fighter aircraft and munitions, is set to increase by 12% this year. Tungsten alloys are commonly used in components of missiles and in the counterweights of airplanes and helicopters, since their density allows the projectiles to conserve momentum and penetrate armor. They are also used in bullets in artillery, grenades and armored vehicles.
Western governments are seeking to reduce dependence on China for critical minerals, including tungsten, and United States aim to develop their first tungsten mine in a decadeMining could also expand to Spain, Brazil, Australia, but it would take about two years for new Western production to materialize, assuming investors believe high prices will persist, analysts say. Some large users are struggling to find other avenues. Carbide tool maker Ceratizit, a division of Austrian Plansee Group, seeks to mitigate supply risk collecting and recycling waste. Likewise, the Swedish engineering group Sandvik mines and recycles tungsten.
“The industrial sector is in desperate need of raw materials,” said Lewis Black, chief executive of Almonty Industries, whose company started production in a mine in South Korea in December and aims to develop the first tungsten mine in the United States in 10 years. Black told Bloomberg that U.S. authorities contacted Almonty last month regarding the immediate availability of the material. Nearly half of its South Korean production is destined for Pennsylvania, where it is used in munitions production. According to Black, the price of tungsten has gained momentum thanks to inventory reduction by users and export restrictions, which have allowed prices, previously held back by Chinese subsidies, to better reflect trends in supply and demand.
Despite its strategic importance, tungsten remains a niche market. Project Blue estimates its value at about $16 billion this year, or about 5% of the copper market at current prices. It is also a much more opaque and illiquid market, as it is not traded on major exchanges. Nevertheless, its earnings over the last year have superato by far those of raw materials like gold and oil.
Aluminum at four-year high and could rise further
Aluminum has also become a major player in the metal markets: it has reached the level highest in almost four years, although it later scaled back some of its gains. Prices rose 1,7% to reach in 3.516,50 dollars per ton, the highest level since March 30, 2022, due to the conflict in Iran which has reduced supplies in the Persian Gulf. Aluminum is sought after by the military for its high lightness, its corrosion resistance and excellent strength-to-weight ratio, making it crucial for the construction of aircraft, missiles, armored vehicles and warships.
According to BMI, a division of Fitch Solutions, aluminum retains a significant growth potential, with the possibility of reach $3.700 per ton, due to growing concern among Western buyers. According to BMI, "recent developments significantly increase the likelihood of a more acute contraction in supply”, with the global market expected to experience an even larger deficit of 1,06 million tonnes this year. Signs of a contracting market are already emerging, with significant orders for withdrawals from the London Metal Exchange's warehouse network.
