Sou Hu Cai Jing·2026-02-27 00:28Core Viewpoint - The metal tungsten has experienced a significant price surge, with a year-on-year increase of over 220% in 2025 and a continued upward trend in early 2026, overshadowing gold's market position [1][3]. Supply Side Analysis - The tungsten market is facing a "triple barrier" on the supply side: quota restrictions, declining ore quality, and limited overseas production capacity [7][9]. - China controls over 80% of global tungsten supply, and the government has implemented strict quotas, reducing the total mining output by 6.5% in 2025 [7][10]. - The average grade of domestic tungsten ore has decreased from 0.42% in 2004 to 0.28% in 2024, increasing extraction costs and difficulties [7][9]. - New overseas tungsten mining projects are not expected to significantly impact supply until after 2027, with non-Chinese controlled new capacity projected to be less than 5,000 tons in 2026 [9][10]. Demand Side Analysis - The demand for tungsten is being driven by emerging technologies, particularly in the photovoltaic (solar) and artificial intelligence (AI) sectors [11][12]. - The demand for tungsten wire in photovoltaic applications is expected to double from 8,300 tons in 2024 to 16,000 tons in 2025, reflecting a 198% year-on-year growth [13]. - AI server production is increasing the demand for high-precision tungsten tools, which are essential for manufacturing advanced printed circuit boards (PCBs) [15][16]. Company Performance - Two leading companies in the tungsten industry, Xiamen Tungsten and China Tungsten High-Tech, are adopting different strategies to navigate the market [19][20]. - Xiamen Tungsten has diversified its operations, controlling 30% of national reserves and focusing on downstream profits, with nearly 40% of its revenue coming from energy new materials by 2024 [20]. - China Tungsten High-Tech is focused on vertical integration within the tungsten supply chain, achieving a 407.52% year-on-year increase in net profit for the first three quarters of 2025 [21][22]. Market Outlook - The tungsten price is expected to remain high and experience strong fluctuations in 2026, driven by a widening supply-demand gap [23]. - The demand for tungsten in photovoltaic applications is projected to reach an 80% penetration rate by 2027, indicating a robust growth trajectory [23][24]. - The ongoing geopolitical dynamics and resource scarcity are enhancing the strategic importance of tungsten as a critical material in the global market [25][26].