I'm observing something interesting in the strategic materials market – the price of tungsten has broken all previous records in recent months. Companies across the entire industrial chain are announcing successive rounds of price hikes, and the situation is becoming truly dynamic.

Here's how it looks: since the beginning of last year, main tungsten products – concentrate, tungsten ammonium, or powder – have increased by over 400 percent. These are no longer ordinary market fluctuations. One tool manufacturing company jokes that "now it's no longer tungsten steel, but tungsten gold." Indeed, the jump is staggering. Tungsten scrap, which cost about 200 yuan per kilogram a year ago, now exceeds 1,000 yuan – nearly a fivefold increase.

What drives this rise in tungsten prices? Primarily, the disruption of the balance between supply and demand. China is the world's largest tungsten producer, but domestic quotas, environmental restrictions, and strategic reserves mean that supply cannot keep up with growing demand. Add to that the increased demand from sectors like photovoltaics, AI, and new energy sources – and you have a recipe for continuous price growth.

It's interesting how this increase affects different segments of the industry. Major mining companies like Xiamen Tungsten and Zhangyuan Tungsten are direct beneficiaries. They have resources, scale, and can absorb fluctuations. But small and medium-sized enterprises? That's where the problem lies. Tool processing companies describe their situation as a "pie with filling" – raw materials are getting more expensive every day, costs are rising, and customers are unwilling to pay more. Cost pressure is enormous.

At the same time, I observe an acceleration in the transformation of the entire ecosystem. Companies realize that at such prices, competing on price no longer makes sense. Instead, they are investing in technology, research, and development. Tungsten wire in photovoltaics is a good example – its share in cutting silicon wafers has already exceeded 60 percent. This means that demand for tungsten will only continue to grow.

Large mining companies are also acting – Xiamen Tungsten recently announced acquiring stakes in mines to strengthen raw material self-sufficiency. This shows that the industry is preparing for long-term growth in demand.

In summary – tungsten prices will remain high for a longer period. This changes the rules of the game across the entire supply chain. Companies that adapt quickly and focus on quality rather than price will survive. The rest will have a tough time. This is a classic market transformation – from a price war to a value war.