Tungsten's Chokepoint Is Here Now
There is a metal inside every advanced semiconductor chip you have ever used. It sits in the interconnects that wire up the transistors. It shows up in several of the process gases used to etch and deposit layers at sub-5nm nodes. It has one of the highest melting points of any element on the periodic table, which is precisely why it cannot be swapped out on short notice. Its name is tungsten.
China controls roughly 80% of global tungsten mine supply and processing capacity. In February 2025, Beijing placed export controls on tungsten and related products, requiring licenses for shipments that had previously moved freely through commercial channels. Eighteen months later, the consequences are landing in chipmaker purchasing departments, Pentagon procurement offices, and a small-cap miner's quarterly filings.
This is the story of what that supply shock actually looks like from the inside, and where it leaves the two publicly listed companies most directly in its path.
Scoreboard: What Just Happened
The numbers from the past twelve months are worth sitting with for a moment, because they are not subtle.
- APT price (Western benchmark, CIF Rotterdam): $453/MTU in Q2 2025. $3,075/MTU as of July 30, 2026. That is a roughly 579% increase in four quarters.
- European APT: Surged from around $1,650/MTU to over $3,100/MTU during 2026, with nearly 90% of that move compressed into six weeks.
- Chinese APT domestic price: A separate, and now diverging, story. The SMM China domestic benchmark stood at $79,731/tonne as of early August, down sharply from $105,775/tonne in July, a decline of roughly 24.6% in one month. The Western and Chinese markets are fragmenting.
- Chinese exports of restricted tungsten products: Down roughly 40% in 2025. Japan's April 2026 imports of three controlled tungsten categories fell 50% from the 2025 monthly average and 63% versus April 2024.
- WF6 (tungsten hexafluoride) pricing: Korean semiconductor companies received notices from suppliers of price increases in the 70% to 90% range for 2026.
- Almonty Industries (NASDAQ: ALM) Q2 2026 revenue: $43.0 million, up 498% year-over-year from $7.2 million. Adjusted EBITDA of $17.6 million, compared to a loss of $4.8 million in Q2 2025.
- ALM stock (August 13, 2026): $14.04. Market cap approximately $4.05 billion.
|
|
Trump: Don't Mess With This American Stock! One little-known U.S. stock is 20x cheaper than AMD – yet more profitable than Airbnb, Chipotle, and Hilton. Backed by Trump and now partnering with a top AI firm, it's poised to explode. Discover why it's called "The Next Stock Market Unicorn" |
The Real Reason: Expectations vs. Reality
Markets treated China's February 2025 export controls as a significant but manageable disruption. The assumption, broadly, was that inventory buffers would buy time, that Japan and Korea would find alternative scrap channels, and that the policy might soften under trade negotiation pressure.
None of those things happened in the way the market expected. In January 2026, China doubled down: the Ministry of Commerce designated just 15 specific companies authorized to export tungsten products, tightening the licensing framework further. By April 2026, Japanese imports had collapsed. By mid-2026, Kanto Denka Kogyo and Central Glass, two major Japanese specialty chemical producers that together account for about 24% of global WF6 supply, had notified Korean customers that supply may be unsustainable through the second half of the year.
Japan has partially compensated by sourcing tungsten scrap from the United States, Singapore, and Europe. U.S. exports of tungsten scrap roughly tripled year-over-year in early 2026. That buys time. It does not fix the structural gap, and scrap cannot replace primary ore concentrate at the volumes advanced semiconductor manufacturing requires.
The divergence between Chinese domestic APT prices and Western export prices tells you exactly how fragmented this market has become. Beijing is letting domestic prices fall while the supply it chooses to export commands a sharp premium. That is not an accident.
Deep Dive: Why Tungsten Cannot Be Skipped
Tungsten's exceptionally high melting point and density make it irreplaceable in several specific semiconductor applications. It is used in the metal contacts and word-line interconnects inside NAND flash and DRAM. It is central to CVD (chemical vapor deposition) and ALD (atomic layer deposition) processes at advanced nodes. And as WF6, it is a process gas used across logic, DRAM, and 3D NAND manufacturing lines globally.
Substitution is real but slow. Lam Research said in early 2025 that its molybdenum ALD platform was in volume production, including early adoption in 3D NAND and advanced logic. Applied Materials validated a molybdenum etch system in high-volume manufacturing as of June 2026. Kioxia has demonstrated a fluorine-free molybdenum word-line process for 3D flash. Those are genuinely meaningful developments. They are also multi-year qualification cycles. A chipmaker cannot swap tungsten CVD lines for molybdenum on a quarterly planning horizon. Not at advanced nodes, and not when the entire qualified manufacturing flow has been built around one material.
Outside semiconductors, tungsten demand is concentrated in cemented carbides for cutting tools and industrial equipment, defense applications including armour-piercing munitions and turbine components, and aerospace. That breadth means demand is sticky and diversified. A semiconductor slowdown does not crater the whole market. It just removes one demand vector while the others hold.
Data Section: The Almonty Numbers
Almonty Industries is the only publicly listed Western-aligned company ramping primary tungsten production at meaningful scale right now. Here is where the business actually stands as of the Q2 2026 filing.
- Q2 2026 revenue: $43.0 million (CAD), +498% year-over-year, +69% sequentially
- Q2 2026 income from mining operations: $26.1 million
- Q2 2026 Adjusted EBITDA: $17.6 million, a swing of more than $22 million from Q2 2025
- Operating cash flow (H1 2026): $31.6 million, versus a $14.9 million outflow in H1 2025
- Net income: $181.8 million, or $0.62 per diluted share. Most of this ($173.1 million) was non-cash gains from revaluation of derivative and warrant instruments and did not affect operating results or cash flow.
- Cash position (June 30, 2026): C$1.23 billion, up from C$268.4 million at year-end 2025, primarily reflecting US$800 million in gross proceeds from the June 2026 oversubscribed convertible notes offering
- APT benchmark (Q2 2026): $3,075/MTU, versus $453/MTU in Q2 2025
- Offtake agreement: Amended July 14, 2026 with Global Tungsten & Powders (part of Austria's Plansee Group). Covers approximately 90% of Phase I output. Pricing improved by roughly 6.3%. Volume contracted up 40%. Term extended by six years to 21 years total, running deliveries into the late 2040s. Contracted annual revenue at current APT pricing: US$490 million.
- Ore stockpile at processing start (July 1, 2026): ~139,700 tonnes at a blended grade of ~0.25% WO₃, with an illustrative gross in-process value of about US$68 million
- Phase I target throughput: ~640,000 tonnes of ore per year
- Phase II target throughput: Up to 1.2 million tonnes per year, fully permitted, contemplated for 2027
- Russell index inclusion: Effective June 29, 2026. Russell 1000 and Russell 3000.
The four parallel projects management plans to fund with the C$1.23 billion cash balance: Phase II at Sangdong, a dedicated tungsten oxide processing facility in South Korea, the Gentung Tungsten Project in Montana, and the Panasqueira mine extension in Portugal.
Is It Cheap? Valuation Check
At $14.04 per share and a $4.05 billion market cap, Almonty is being valued against contracted revenue potential that has not yet fully flowed through operations. That is normal for a mine in ramp-up. The question is whether the current price reflects execution risk adequately.
The offtake covers ~90% of Phase I output at pricing tied to current APT levels, yielding a contracted annual revenue figure of US$490 million. At full Phase I capacity, the implied revenue-to-current-market-cap ratio is well under 10x. For a miner with a 21-year offtake anchored to a confirmed supply crisis, that is not obviously expensive. But Phase I is still ramping. The stockpile was being used to stabilize plant feed in early July. The ramp from development ore to consistent commercial-scale output is where investors have been burned before in resource stocks.
The APT pricing assumption embedded in that US$490 million contracted revenue figure also matters. The Western benchmark has held near $3,075/MTU. The Chinese domestic market has corrected sharply. If the Western benchmark softens toward the Chinese domestic level, the contracted revenue figure and the implied valuation both shift. That is a risk worth sizing explicitly before you build a position.
Linde (NASDAQ: LIN) sits in a very different part of the valuation spectrum. At record Q2 2026 sales of $9.3 billion and full-year EPS guidance of $17.70 to $17.90, Linde trades at a premium multiple appropriate for a blue-chip industrial with a record $8.1 billion project backlog and near double-digit EPS growth. The tungsten-adjacent angle here is helium: Middle East disruptions have created pricing tailwinds, but also margin-dilutive dislocation costs. Linde's management expects helium normalization to extend into early 2027. For bargain hunters, that window is a known headwind, not a surprise.
|
|
$71 billion in revenues. That makes Anthropic bigger than McDonald's and Starbucks combined. And the trillion-dollar IPO could happen within 90 days. $71 billion in annualized revenue. That makes Anthropic bigger than McDonald's and Starbucks, combined. Starbucks did $37.2 billion last year and McDonald's did $26.9 billion. In the last year alone, Anthropic's revenue jumped from $5 billion to $71 billion, according to independent estimates. That's a 1,320% increase in 12 months. The company just filed for its IPO on June 1 and the stock could start trading on the Nasdaq as soon as October – at a valuation of $1 trillion or more. I've discovered a secret backdoor to claim a pre-IPO stake. Click here for my urgent report with details (email required). |
Bull / Base / Bear
Bull Case
Phase I ramp proceeds on schedule through Q3 and Q4. The January 1, 2027 Pentagon procurement deadline is enforced strictly, triggering a wave of U.S. defense procurement redirected toward Almonty's non-China output. WF6 shortages intensify, forcing Korean and Taiwanese chipmakers to accelerate qualification of alternate feedstock sources, pulling Sangdong concentrate into the semiconductor supply chain sooner than the base case assumes. Western APT holds near current levels. At full Phase I output with the existing offtake, the revenue run rate approaches US$490 million annually. Phase II sanction follows naturally from cash flow and balance sheet.
Base Case
Phase I ramp takes two additional quarters to reach consistent throughput. Western APT prices remain elevated but pull back modestly from the $3,075/MTU Q2 level as scrap recycling and modest new supply partially offset the China shortfall. The Pentagon deadline creates demand pull but implementation is phased and partial. Revenue climbs through H2 2026 and into 2027. Phase II is financed from the existing C$1.23 billion cash balance and comes online in late 2027 or early 2028.
Bear Case
Western APT converges toward the corrected Chinese domestic price. A diplomatic easing of export controls, however unlikely, removes the supply premium. Sangdong encounters grade or throughput variability during ramp-up that delays consistent commercial output. The purity requirements for semiconductor-grade downstream processing prove harder to achieve at scale than management projects. The convertible notes overhang creates dilution pressure if the share price moves against the conversion terms. In this scenario, the gap between contracted revenue potential and actual cash flow remains wide for longer than the market will tolerate.
Action Plan
Almonty Industries (ALM) -- Aggressive posture, scale-in framework
This is not a stock you buy in one ticket and forget. The ramp is real, the offtake is contracted, and the supply shock has intensified. But Phase I is still in commissioning. Until throughput data is consistent across multiple months, the earnings power is a projection, not a track record.
- First tranche: On a confirmed retest of recent support levels with positive Phase I throughput data in hand. Size it at a level you can hold through a 20-30% drawdown without blinking.
- Second tranche: After Q3 2026 results confirm sequential revenue growth and Phase I is producing consistently against the offtake schedule.
- Third tranche: If the January 2027 Pentagon deadline is enforced with visible procurement flow toward non-China suppliers, and Phase II financing is confirmed.
- Cut discipline: If Phase I throughput data misses materially in Q3, or if the Western APT benchmark breaks below $2,500/MTU on sustained volume, the original bull case needs to be reassessed before adding.
Linde (LIN) -- Conservative posture, quality compounder with a known near-term friction
The helium dislocation is a headwind on margins, not on the business. Management expects normalization by early 2027. The electronics backlog is a record $8.1 billion. Q3 EPS guidance of $4.45 to $4.55 implies continued double-digit growth. For a long-term holder, the current margin pressure from helium logistics costs is a known, time-limited friction, not a structural problem. Add on weakness. Hold through the margin recovery.
Cheap Investor Scorecard
| Item to Track |
What to Watch For |
Timing |
| Phase I throughput data |
Consistent monthly ore feed vs. plant capacity target; MTU sold per quarter |
Q3 2026 results |
| Western APT price |
Hold above $2,800/MTU to sustain contracted revenue math |
Weekly |
| China domestic vs. Western APT spread |
Widening spread = China tightening exports; narrowing = pressure on Western premium |
Monthly |
| Pentagon procurement rule (Jan 1, 2027) |
Any signal of strict or phased enforcement; named supplier approvals |
Q4 2026 |
| WF6 allocation signals from Korean chipmakers |
Samsung, SK Hynix disclosures on specialty gas sourcing or pricing |
Ongoing |
| GTP offtake delivery performance |
Any amendment, force majeure, or delivery shortfall under the July 14 amendment |
Quarterly |
| Phase II sanction decision |
Board approval and financing confirmation for 1.2 million tonne/year expansion |
H1 2027 |
| Convertible notes dilution risk |
Share count and conversion price vs. market price at each quarter end |
Quarterly |
| Linde Q3 2026 margins |
Recovery from helium dislocation costs; EPS vs. $4.45-$4.55 guidance range |
October 22, 2026 |
| Molybdenum substitution pace |
Volume production ramp at TSMC, Samsung for Mo-based processes |
Semi-annual |
Bottom Line
The tungsten supply shock is not approaching. It is already running. APT is at $3,075/MTU in the West, up from $453/MTU a year ago. Japanese WF6 producers warned Korean chipmakers in April. Chinese domestic prices are correcting while export volumes stay restricted. The market is fragmenting in exactly the way the bull case always predicted, and faster than the skeptics said it would.
Almonty's Q2 2026 results, a 498% revenue surge to $43 million with $17.6 million in Adjusted EBITDA, are the first real-money evidence that Sangdong can do what management spent twelve years promising. The $1.23 billion cash position removes the financing risk that killed similar resource-development stories in earlier cycles. The 21-year offtake with Global Tungsten and Powders gives revenue visibility that most commodity producers would spend years trying to negotiate.
If Phase I ramps consistently and the Pentagon deadline lands as written, ALM at current prices will look cheap in retrospect. If the ramp stumbles, or if a diplomatic easing of China's export controls removes the Western price premium, the contracted revenue figure shrinks and so does the valuation case.
The key date on the calendar is January 1, 2027. Between now and then, watch Phase I throughput data every quarter and the Western APT benchmark every week. Those two numbers will tell you more than any analyst note.
Stay skeptical. Stay specific. Stay cheap.
