China’s tungsten products industry dominates globally, with a production of approximately 65,000 tons in 2024, accounting for 85% of the world’s total (China Tungsten Industry Association, 2024). However, the industry faces challenges such as insufficient high-end products and technologies (high-end cutting tools occupy only 20% of the market, China Machine Tool & Tool Builders’ Association, 2024) and low recycling rates (~10%). Although there has been no explicit large-scale tariff increase on China’s critical minerals, the beginning of 2025 saw many Chinese industries confronting challenges due to U.S. tariff hikes (with tariffs on Chinese products reaching up to 245%). This necessitates a reassessment of strategic positioning.

Tungsten carbides represent the primary sector of the tungsten products industry. This article analyzes the current practices of major global Tungsten carbide companies (Sandvik, Kennametal, Iscar, Mitsubishi Materials, and Ceratizit) in terms of raw materials, markets, recycling capabilities, and responses to tariff policies, drawing insights to propose strategic recommendations for China’s tungsten products industry.

Analysis of Major Global Tungsten carbide and Tungsten Product Companies

Dependence on Chinese Raw Materials

China accounts for ~85% of global tungsten ore production (International Tungsten Industry Association, 2024), serving as a critical raw material source for the Tungsten carbide industry.

Kennametal and Sandvik exhibit high dependence on Chinese tungsten raw materials (40% and 35%, respectively), making them significantly vulnerable to tariff measures. Both are accelerating efforts to diversify their supply chains.

Ceratizit has lower dependence (20%) and adopts a more flexible procurement strategy.

Global trends suggest that China’s share in raw material supply may decline by an average of 10%-15% by 2026. However, complete substitution remains difficult in the short term, underscoring the strategic value of China’s tungsten resources.

 

Dependence on the Chinese Market

China constitutes ~30% of the global cutting tools market (China Machine Tool & Tool Builders’ Association, 2024), with annual growth of 15% driven by aerospace and new energy demand.

Sandvik and Mitsubishi Materials rely heavily on the Chinese market (15%-20%), but their localized production in China helps mitigate tariff impacts.

Kennametal and Ceratizit have lower dependence (10% and 8%, respectively), enabling easier shifts to Southeast Asian and European markets.

China’s market size is RMB 60 billion. If tariff issues persist long-term without significant improvement, foreign companies may accelerate local production, threatening domestic market share.

會(huì)社	China Market Revenue Share	Strategic Measures
Sandvik	15%-20% (estimated)	Establish R&D center in 2025, launch localized cutting tools
Kennametal	~10% (2024)	Introduce low-price tools from Shanghai factory (10%-15% price reduction)
Iscar	~12% (estimated)	Expand Dalian factory, launch low-cost tools in 2025
Mitsubishi Materials	~15% (estimated)	Expand production in China, target 18% market share by 2025
Ceratizit	~8% (estimated)	Set up Shanghai office in 2025, launch battery-specific cutting tools

Chart1.Localized Production Facilities of Major Enterprises in China

 

Tungsten Scrap Recycling Capacity and Recovery Rate

Globally, tungsten scrap recycling accounts for 30% of total supply (ITIA, 2024).

會(huì)社	Annual Recycling Capacity	Recycling Rate	Key Features	ソース
Sandvik	~5,000 tons	~40%	Chemical recycling, accounts for 20% of raw materials; 2030 target: 30%	Sandvik 2024 Annual Report
Kennametal	~3,000 tons	~35%	Chemical/mechanical recycling, 15% of raw materials; 2025 target: 20%	Pittsburgh Business Times, Mar 2025
Iscar	~2,000 tons	~30%	Direct recycling method, 10% of raw materials; plans to expand recycling line in 2025	DVC News, Nov 2024
Mitsubishi Materials	~1,500 tons	~25%	Chemical recycling, 8% of raw materials; 2026 target: 30%	Mitsubishi Materials Website, Dec 2024
Ceratizit	~2,500 tons	~45%	Optimized for 3D printing, 25% of raw materials; 2025 target: 50%	Cefabzh Website, Oct 2024

Chart2.Recycling Capacities of Major Enterprises

Opportunities and Challenges for China’s Tungsten Products Industry

Analysis of global companies reveals both opportunities and challenges for China’s tungsten products industry, forming the fundamental development logic for our country’s tungsten product supply chain strategy.

 

Breakthrough Technological Bottlenecks to Capture High-End Markets

The high-end cutting tool market offers a profit margin of 30%, far exceeding the 10% margin in the low-end segment. Compared to foreign technologies like Sandvik’s CoroPlus?, China’s technological gap remains significant. Therefore, accelerating innovation is imperative. The government should provide higher R&D tax incentives (e.g., 30%) to encourage capable enterprises to increase R&D investment (e.g., 5% of revenue). Efforts should focus on developing nano-grade tungsten powder, high-performance coated tools, AI-optimized processing technologies, and high-end customization.

Collaborations between companies like China Tungsten & Hightech (Zhuzhou Cemented Carbide) and Xiamen Tungsten (Xiamen Golden Egret) with institutions such as Tsinghua University, Central South University, and Xiamen University can advance low-cobalt alloy development to reduce production costs. Enterprises should adopt Iscar’s modular tool approach, introducing replaceable toolhead systems to lower customer replacement costs.

China should aim to increase its high-end cutting tool market share from 20% to 35% by 2028–2030, generating annual revenue growth of approximately RMB 200–250 billion. This expansion would cater to demands in aerospace (e.g., C919, C929, fifth- and sixth-generation aircraft, drones), low-altitude economy, and new energy (battery and automotive tools/molds).

 

Optimize Global Layout to Mitigate Trade Barriers

Current tariff tensions may compress export volumes and profit margins. Following the examples of Kennametal (Mexico factory) and Iscar (India expansion), overseas expansion is critical. China should encourage Xiamen Tungsten and Zhuzhou Cemented Carbide to establish factories in Vietnam and India to capture more overseas capacity and markets, producing low-cost tools (estimated 15% price reduction). Additionally, securing tungsten ore agreements with Brazil, Central Asia, and Mongolia could lock in 10% of global raw material supply and primary smelting capacity. Exploring assembly plants in Mexico under USMCA’s low tariffs would facilitate entry into the North American market (25% of global tool demand).

The government should introduce overseas M&A incentives (e.g., 50% investment subsidies) and resource development support (e.g., low-interest loans) to help acquire tungsten mines in Australia/Canada or European toolmakers (e.g., small coating technology firms). Synergies with domestic supply chains, such as CATL’s European plants, should be leveraged.

This strategy capitalizes on low-cost regions (Vietnam’s 20–50% cheaper labor) and high-growth markets (Southeast Asia’s 10% annual growth), boosting export profits and raising Southeast Asia’s market share from 15% to 20%+. It also facilitates local resource development and recycling of tungsten scrap.

 

Promote Tungsten Scrap Recycling to Build a Green Supply Chain

China’s tungsten recycling rate is alarmingly low, wasting 5,000 tons annually and incurring 30% higher costs. Learning from Ceratizit (45% recycling rate) and Sandvik (40%), China must act under the Solid Waste Law (2020) and Restricted Waste Import List (2020), which currently limit tungsten scrap imports. Domestic scrap collection rates are only 20%, hindering circular economy goals. Recommendations:

Ease Scrap Import Restrictions: Revise policies to allow imports with strict environmental monitoring.

Expand Domestic Recycling: Build recycling hubs in Hunan (Zhuzhou), Jiangxi (Ganzhou), Xiamen (Longyan), and Hebei, adopting zinc/chemical methods to achieve a 30% recycling rate by 2028.

Adopt 3D Printing: Reduce tool costs through additive manufacturing.

Increase R&D Investment

Establish a National Tungsten Recycling Laboratory with Central South University to develop electrochemical methods (target: 50% recycling rate). Encourage enterprises to allocate more revenue to R&D.

 

Introduce Tax Incentives

Reduce corporate income tax for recyclers, subsidize green equipment, and build a scrap collection network covering 80% of tool manufacturers. Align with carbon neutrality goals (2060).

 

Foster Industry Collaboration

Partner with COMAC (aviation) and CRRC (rail) to develop customized tools (e.g., composite materials for aerospace, rail processing), targeting 50% market share by 2027–2030. Expand mid-to-high-end capacity while serving SMEs and overseas low-end markets.

 

Advance Smart Manufacturing

Promote industrial IoT, big data centers, and AI-driven design (e.g., high-entropy tungsten alloys) to leverage China’s institutional and resource advantages.

 

Strengthen Global Cooperation

Collaborate with Japan/Korea on semiconductor-grade tools to dominate Asia’s high-end market.

Host international trade fairs and lead ITIA to shape global standards.

 

Establish an Industry Fund

Create funds (e.g., Jiangxi/Hunan governments + SSE) to balance supply-demand, fulfill national reserves, and counter foreign capital control.

結(jié)論

Global leaders like Sandvik and Ceratizit thrive on diversified supply chains, localized production, and high recycling rates—exposing China’s gaps in technology, recycling, and global strategy. By prioritizing tech breakthroughs, recycling optimization, and overseas expansion—while fostering partnerships with aviation/rail sectors—China can secure its position as a tungsten resource, production, and recycling powerhouse. Liberalizing scrap imports and upgrading recycling tech will solidify this leadership, ensuring long-term dominance in the global tungsten industry.