Exports have returned to zero, prices have increased by 60%, and prices have tripled—Japan’s manufacturing industry is experiencing a chain shock caused by the shortage of tungsten raw materials.
But what deserves more attention than these numbers is a detail that is almost ignored in customs data: In April 2026, the average export price of China’s tungsten hexafluoride surged by 203.83% year-on-year.
This is not an ordinary price increase. This is quantitative proof that the pricing power of the industrial chain has been transferred from Japan to China.
In 2026, the total global tungsten supply and demand gap will reach 23,000 tons.
What is the concept of 23,000 tons?
Japan’s full-year tungsten demand in 2024 is 9,370 tons—that is to say, this year’s gap is equivalent to Japan’s two and a half years of demand.
Where did the gap come from?
It’s not that demand suddenly surged, but that supply was artificially tightened.
China controls more than 78% of the world’s tungsten production and more than 90% of the high-purity tungsten powder refining capacity. It will include tungsten under export control from 2025, and will specifically tighten controls on Japan in January 2026.
The effect of the policy implementation is directly reflected in customs data: from February to April 2026, China’s exports of tungsten carbide and tungsten powder to Japan dropped to zero for three consecutive months; exports of high-purity tungsten to South Korea plummeted from 61 tons in March to 1 ton in April.
Returning to zero is not rhetoric, it is fact.
Sumitomo Electric President Haru Inoue personally admitted at the press conference in May: “Purchasing from China has completely stopped.”
Japanese companies have cut off supply, and downstream customers will not wait.
European, American, Japanese and Korean precision manufacturing, aerospace and automotive parts customers who originally purchased from Sandvik, Mitsubishi and Sumitomo are turning to Chinese suppliers.
Tiangong International’s carbide cutting tool business revenue surged by more than 300% year-on-year in the first quarter of 2026, and orders are scheduled for the third quarter.
Sri New Materials continues to increase its orders for tungsten-copper high-voltage contacts from Eaton, Schneider, and ABB. At the same time, it has added orders for tungsten-copper heat dissipation bases for overseas 800G/1.6T optical modules, with a total investment of 900 million yuan to expand production.
CSSC Special Gas has the world’s largest tungsten hexafluoride production capacity of 2,000 tons/year, operating at full capacity, and overseas customer inquiries have increased by more than 200% year-on-year.
The relationship between these figures is not parallel, but a transmission relationship: supply of raw materials is cut off → overseas manufacturing companies suspend production/increase prices → downstream customers look for alternatives → Chinese leading companies receive orders → supporting foreign trade service providers simultaneously increase their volumes.
Foreign trade service providers supporting leading companies such as Tiangong International will generally achieve a 2-3 times revenue growth in the first quarter of 2026.
This is not a prediction, it is a fact that has already happened.
The cake that foreign trade companies can share is not at the upstream raw material end – the export of tungsten powder and ammonium paratungstate has been strictly controlled. From January to April 2026, the export of tungsten powder fell by 63.9% year-on-year, and the export of ammonium paratungstate fell by 98.4%.
The dividends are all in the deep processing and supporting services, and there are three specific categories:
The first category is distribution orders for finished civilian tools.
The production capacity of Japanese tool manufacturers has shrunk, and overseas industrial customers need to find new suppliers.
Foreign trade companies connect with domestic compliant carbide tool factories to undertake the overseas distribution of civilian taps, drill bits, and industrial tools. The gross profit margin is 25% – 50%, and the profits can be cashed in 3 – 6 months.
The second category is the cross-border circulation of recycled tungsten materials.
Overseas small and medium-sized manufacturing companies lack scrap tungsten recycling capabilities. Foreign trade companies connect with domestic regular scrap tungsten purification manufacturers to export civilian-grade recycled tungsten carbide and recycled tungsten alloy blocks. The gross profit margin is 30% – 60% and can be started in 2 – 4 months.
No export qualifications for primary tungsten ore are required.
The third category is cross-border supply chain compliance services.
The biggest headache for overseas customers is not that they can’t find the goods, but that they don’t know how to import in compliance with regulations.
Provides packaging services of supply docking + export qualification agency + special logistics + localized delivery. The service rate can cover 5% – 12% of the value of the goods. It is light assets and can be implemented in 1 – 2 months.
But one figure must be made clear: although the gross profit margin of tungsten hexafluoride supporting agents exceeds 100%, the threshold is extremely high, requiring hazardous chemicals business qualifications and semiconductor factory supply certification, and ordinary foreign trade companies cannot enter at all.
In the past, China traded tungsten raw materials, exporting a batch of tungsten powder to earn a low gross profit margin. After Japan processed it into cutting tools or tungsten hexafluoride, it was sold back to the world at 10-20 times the price.
The current export structure has been completely reversed: the export value of low value-added tungsten powder plummeted by 63.9%, while the export value of high value-added deep-processed tungsten products increased by more than 120% year-on-year.
Profits remain in the country, and the foreign trade link undertakes orders for terminal high value-added products. The overall profit margin is 3 to 5 times that of tungsten raw material trade in the past.
But there is a red line that cannot be touched: any export involving controlled tungsten items (tungsten powder, tungsten carbide, tungsten hexafluoride) must apply for a dual-use item export license in advance, verify the civilian attributes of the end user, and keep the transaction voucher for 3 years for future reference.
It is prohibited to directly or indirectly provide related products to Japanese military users.
