Almonty Industries: Commodity Shock Escalates – Tungsten Becomes a Bottleneck

China Loses Control – Structural Deficit Drives Prices

For decades, China dominated the global tungsten market, accounting for around 80% of production and processing. This one-sided dependence is now increasingly becoming a risk for Western industrialized nations. Export restrictions, political tensions, and targeted supply chain interventions are significantly exacerbating the situation. At the same time, the US and Europe are advancing their own raw materials strategies. Particularly explosive is the fact that, starting in 2027, the US will prohibit the use of Chinese tungsten in military applications.

The result is a structural supply deficit. Demand is growing across the board, from high-performance chips and AI infrastructure to state-of-the-art weapons systems. At the same time, there is a lack of new projects outside China that could provide short-term relief. The massive price surge to over USD 3,200 per MTU is therefore not a short-term outlier, but rather a reflection of a fundamental shift. Many market observers expect this price level to become established in the long term. Additionally, shortages of intermediate products such as tungsten hexafluoride are further exacerbating the situation, putting particular pressure on the semiconductor industry.

South Korea, the US, and Europe – A Compelling Strategic Trio

In this environment, Almonty Industries positioned itself early on as a key Western supplier and is benefiting from several structural trends. At the center is the Sangdong mine in South Korea, one of the most significant tungsten projects outside of China. The production ramp-up is proceeding according to plan, with initial output data confirming expectations. Significant volumes are already being processed in the current phase, while the second expansion phase, starting in 2027, is expected to significantly increase capacity. Looking ahead, the project alone could account for around 40% of global tungsten production outside of China.

Particularly noteworthy is the combination of high ore quality and low production costs. The project remains profitable even under conservative price assumptions. At current price levels, however, significant margin potential is emerging. Analysts are already projecting net margins of around 60% even at significantly lower tungsten prices. Given actual market prices, the profit potential is likely to be significantly higher. As a result, Sangdong is increasingly emerging as a potential cash flow engine capable of driving sustainable growth in enterprise value.

At the same time, the company is consistently expanding its strategic presence in the US. With a project in Montana, the relocation of its headquarters, and a stronger institutional foothold, the company is gaining direct access to the American market. This step is of great significance, as the US is making a concerted effort to reduce its dependence on China while simultaneously building its own supply chains. The planned commencement of production in the United States thus meets a politically driven demand. Furthermore, the US presence facilitates access to grants, loans, and institutional investors, thereby significantly improving financing for further growth.

This strategy is complemented by existing operations in Europe. The long-established Panasqueira mine in Portugal delivers stable cash flows and supports the financing of the expansion. At the same time, projects in Spain provide additional growth prospects. This geographic diversification reduces risk and strengthens the company's position as a reliable supplier to multiple industrialized nations. Added to this is a clear strategic approach to acquisitions. Instead of high-risk exploration projects, management is focusing specifically on existing properties with established infrastructure. This shortens development times and significantly reduces investment risks.

Another key factor is long-term off-take agreements, particularly with customers in the US and nearby regions. These not only secure stable revenue over many years but also provide planning certainty in a traditionally cyclical commodities market. At the same time, the company's geopolitical significance is further strengthened as it establishes itself as a reliable partner for critical supply chains. Overall, this creates a strategic triad of Asia, Europe, and North America that is virtually unique in the tungsten sector.

Revaluation Driven by Scarcity and Geopolitical Power

The tungsten story is just beginning. A structural supply deficit, rapidly rising demand from high-tech and defence sectors, and the geopolitical realignment of supply chains form a strong foundation for sustained high prices. Almonty Industries is one of the few players capable of closing this gap. With growing production capacity, strategic proximity to the US, long-term off-take agreements, and exceptional margin prospects, the company possesses significant revaluation potential. There are many indications that, despite recent price gains, the stock has not yet reached its peak.