Almonty, RENK, and SGL Carbon: Three Promising Stocks for the New Order in Raw Materials and Defence

Almonty: Tungsten Star on the Verge of a New Valuation Level

Hardly any other commodity stock has electrified investors in recent months quite like Almonty Industries. The tungsten specialist has evolved from a largely overlooked niche stock into one of the most spectacular stock market stories in the commodities sector. Over the past 12 months, the stock has risen from under USD 4 to over USD 23. Although profit-taking followed the strong rally, fundamentally the story now appears more mature than exhausted. That is because Almonty has reached a point where fantasy can become operational reality.

Tungsten has long been a commodity for specialists. This extremely hard metal, with a melting point of over 3,400 degrees Celsius, is used in high-performance tools, machinery, electronics, energy applications, and defence equipment. It is needed where other materials reach their physical limits. In times of geopolitical tension, this property suddenly takes on strategic military significance. Anyone who wants to build modern ammunition, armour, hypersonic weapons, precision components, or heat-resistant high-performance parts needs a secure supply of tungsten.

That is precisely what makes the Almonty story so compelling. The global tungsten market is small but highly concentrated. China dominates production, while Western countries are growing increasingly nervous about critical raw materials. Export controls, trade conflicts, and new procurement rules in the defence sector are increasing the pressure to establish independent supply chains. Starting in 2027, critical raw materials from China, Russia, and North Korea are set to become largely off-limits to the US Department of Defense. For Western suppliers like Almonty, this could create a historic window of opportunity.

The operational game-changer remains the Sangdong mine in South Korea. The project is considered one of the largest and highest-grade tungsten deposits outside of China. For a long time, Sangdong was primarily a promise. Now, the transition to production is underway. The first phase of expansion is complete, and ramp-up has begun. With the second expansion phase, annual processing capacity is expected to increase significantly in the long term. Even the first phase alone has the potential to propel Almonty into a new dimension of revenue and earnings. With tungsten prices recently exceeding USD 3,000 per MTU and expected production costs well below that level, the margin potential is enormous. The story becomes even more compelling due to existing offtake agreements. Almonty points to several long-term supply agreements, including a 15-year contract with a US customer for the majority of Sangdong's first-phase production. This is an important point for investors. After all, the stock's value will then depend not only on the daily price of tungsten but increasingly on predictable, strategic supply chains. What started as a commodity speculation could evolve into a cash flow player with a unique geopolitical position.

The latest capital measure fits into this picture. Almonty has successfully placed a large convertible senior notes offering totalling USD 800 million, thereby significantly strengthening its balance sheet. The offering was significantly oversubscribed. After deducting costs, approximately USD 773 million will flow into the company's coffers. Almonty plans to use the funds to repay debt, strengthen its operating business, and invest in specific financial instruments to prevent dilution of its shares. In the short term, the placement caused some market nervousness, as convertible notes always carry the risk of dilution. Strategically, however, the move makes sense. Any company that, during a key growth phase, has the opportunity to secure long-term, low-cost financing while simultaneously bringing institutional investors on board gains room to maneuver. That is exactly what Almonty needs right now for its production ramp-up, potential expansions, and new strategic projects. Since the most recent financing round, Jorge Beristain has also joined Almonty as the new CFO. The executive gained experience at Ryerson Holding and Deutsche Bank and is expected to strengthen the financial foundation for upcoming production at the Sangdong mine in South Korea and at other locations.

Second Strategic Metal Story

Almonty has long been thinking bigger than just Sangdong. In Portugal, the Panasqueira mine is already in production. Additional projects are underway in Spain. In Montana, the company is working with Gentung on a potential US tungsten project. If this were to develop into the first commercial tungsten mine in the United States in decades, it would also represent a political success. In Washington, there is close attention on who can supply tungsten outside of China. Additional excitement comes from the molybdenum project near Sangdong. The drilling program is underway, and initial progress has been reported. Should Almonty confirm the historical data there and prove the existence of an economically viable resource, a second strategic metal story would emerge on the same property alongside tungsten. South Korea, in particular, has an interest in diversifying its supply of critical metals. For Almonty, this would be a welcome additional advantage.

The company's increasing focus on the US is also noteworthy. The company's headquarters has been relocated to Montana; the Nasdaq listing increases visibility among investors; and Beristain, a CFO with excellent connections in both the commodities sector and on Wall Street, has been brought on board. Almonty is building a broader strategy and clearly intends not only to be a commodities producer in the future but also to position itself as a systemically important Western supplier. Of course, this stock is no "widow-and-orphan stock." Following the price rally, market participants' expectations are high. Yet the opportunity is extraordinary. Almonty sits at the intersection of commodity shortages, a defence boom, Western supply chain security, and AI potential. It is precisely such intersections that often drive the biggest stories on the stock market. Investors who can tolerate high volatility and believe in the strategic tungsten story will still find Almonty to be one of the most exciting commodity stocks of the coming years—and can still buy the stock at a relatively low price right now.

RENK: The German Defence Lever

Investors who view Almonty as a raw materials supplier for the new security order will find RENK to be a suitable complementary German stock. The Augsburg-based company is not a traditional defence contractor, but rather a specialist in propulsion and transmission systems. That is precisely what makes it so interesting. Tanks, ships, and heavy military vehicles require robust, high-performance technology. RENK supplies key components for these applications. Operationally, the story is solid. Order intake reached a record high in the first quarter, and the order backlog is also at an all-time high, ensuring strong visibility. Unlike many cyclical industrial stocks, RENK does not have to rely on a general economic recovery. The tailwind comes from defence budgets. Germany, Europe, and NATO countries will have to invest significantly more in equipment, modernization, and operational readiness in the coming years.

The stock is no longer a bargain following the rally. Yet RENK possesses a rare combination of structural growth, high margins, and political tailwinds. Those looking to capitalize on the defence boom do not have to limit themselves to the big names. Specialized suppliers often benefit as well, because their components are difficult to replace. This is precisely what makes RENK an exciting German beneficiary of the new defence landscape.

SGL Carbon: The Underrated Materials Wild Card

Less obvious is the future defence-related potential of SGL Carbon. The stock was long considered a problem stock. Weak demand in certain sectors, caution among semiconductor customers, and a challenging economic environment have weighed on sentiment. But SGL Carbon, in particular, is worth a second look for speculative investors. The company produces specialty materials, graphite, and carbon solutions that are needed in numerous future markets. Graphite is not just important for batteries. It also plays a role in semiconductor processes, high-temperature applications, energy systems, and, looking ahead, in new nuclear technologies. The geopolitical trend in Europe toward greater independence in critical supply chains is also providing a tailwind for SGL Carbon. Things get really exciting when it comes to armaments and defence. Carbon and composite materials are gaining importance in the military sector, for example, in drone construction and in lighter, more durable vehicle components. This adds to SGL's upside potential. SGL Carbon is already working to align its portfolio more closely with high-margin specialty applications. In the short term, the financial figures are not yet spectacular, and the EBITDA forecast appears transitional. However, it is precisely such phases that can be interesting for small-cap investors when the market has not yet priced in future opportunities.

The shareholder structure offers further potential. With strong anchor shareholders in the background and a valuation that does not appear excessive when measured against individual business segments, SGL remains a candidate for strategic consideration. With major shareholders such as Skion—owned by BMW heiress Susanne Klatten—and holdings from the BMW and VW circles, a strategic deal is by no means out of the question. Especially since the automotive industry's great carbon euphoria has yet to materialize, and attractive buyout offers might now find a more receptive audience among major shareholders than they would have a few years ago. A portfolio restructuring, an investment by an industrial conglomerate, or a stronger focus on graphite solutions for energy and high-tech markets could quickly change SGL Carbon's perception on the stock market.

Almonty, RENK, and SGL Carbon each serve different parts of the same overarching story: making the Western world more independent, more secure, and more technologically resilient. Almonty supplies the strategic raw materials, RENK produces key technology for military rearmament, and SGL Carbon provides specialty materials for energy, industry, and high-tech applications. Among this trio, Almonty is the most speculative, but also the most exciting and highest-potential stock. If the Sangdong ramp-up is successful, additional offtake agreements are secured, and the US-related upside story in Montana becomes more concrete, the stock could be poised for a new valuation level despite its already strong price performance. RENK offers investors a more defensive defence-sector lever with high order visibility. SGL Carbon, on the other hand, is the overlooked materials wildcard with turnaround and takeover potential.