US Tungsten Stockpile Drawdown Fuels Strategic Push for Non-Chinese Supply Chains

Stifel's recent analysis highlights the depletion of the US National Defense Stockpile for tungsten, a critical material for defense applications, as China maintains dominance in global production and has imposed export controls. USGS data confirms no commercial US tungsten mining since 2015, with net import reliance exceeding 50% and past shipments from government stocks (e.g., over 1,000 metric tons of concentrate in 2021). Government plans now include potential FY2025 acquisitions of 2,041 metric tons of tungsten.

China accounted for roughly 78-80% of global tungsten output in 2025, prompting US policy responses including a 2027 defense procurement rule restricting Chinese-sourced material. This has driven tungsten prices up dramatically—reports cite surges of 350-775% since early 2025 amid export restrictions and heightened defense demand from conflicts.

Recent actions include a Defense Logistics Agency contract with Elmet Technologies valued up to $2 billion (with $150 million guaranteed) for stockpile replenishment through 2031-2033, alongside Pentagon investments in processing capacity. Stifel analysts Jonathan Siegmann and Brock Cannon initiated coverage on Almonty Industries (NASDAQ: ALM) with a Buy rating, positioning the company—via its Sangdong mine in South Korea and Panasqueira operations—as a leading Western producer by 2028, potentially supplying a significant share of allied needs.

Broader efforts involve Title III Defense Production Act funding for domestic projects and international partnerships, reflecting bipartisan priority on critical materials diversification beyond China for defense, AI, and reindustrialization themes.