Tungsten supercycle, page-2

This is from a poster on twitter. Same theme - TUNGSTEN SUPER CYCLE

THE US DEFENCEINDUSTRIAL BASE + THE AI BUILDOUT ARE ABOUT TO COLLIDE IN THE SAME SUPPLYCHAIN, CREATING THE FIRST TUNGSTEN SUPERCYCLE.

Bloomberg justreported on the 557% tungsten rally. Here's the thesis on why they are wrongand why this isn't a rally. It's a supercycle.

Tungstens uptrendwas happening over a eyar before the Iran/US disruption. It was first triggeredby geo-political policy via US/China decoupling.

The U.S NDAA bangoes live January 1, 2027. No Chinese-origin tungsten in any US defencecontract. Not a proposal. Law. Bipartisan. Signed.

China controls82% of global supply. And they've already stopped exporting.

Every priortungsten price shock, WWII, Korea, 2012 was driven by defence demand alone.When the war ended, prices collapsed. One buyer disappeared and the cycle ended.

But here's THEMOST VITAL DIFFERENCE FROM ANYTHING ELSE IN HISTORY.

This timesomething exists that has never existed before in tungsten's history: a secondstructural buyer that doesn't care about war or peace. Semiconductors.

TWO SECTORSTHAT ARE GOING TO SIPHON 60% OF THE SUPPLY BY 2030

Every chip at≤22nm nodes uses tungsten plugs connecting transistors to copper wiring. Asingle 300mm wafer uses 2-5g of tungsten. $TSM processes9.6M of those wafers a month.

The CVD chambersdepositing films onto $NVDA,$TSM, $INTC wafersrun on tungsten hexafluoride, a direct downstream product of APT. Thesputtering targets in PVD deposition weigh 2-15kg each and get consumed over200-500 wafers. The heating elements in wafer annealing furnaces run at2,200°C+ continuously.

Semiconductorsweren't a meaningful tungsten consumer until sub-22nm nodes went to massproduction around 2016-2018. AI data centres only started scaling in 2023. Thisdemand vertical literally didn't exist during any prior tungsten squeeze.

The semiconductorindustry consumed 2,500t of tungsten in 2024. By 2030 that doubles to5,000-6,000t. For context: total non-Chinese global tungsten production is only14,000t.

Semiconductorsalone going from 2,500t to 5,500t means the chip industry's share ofnon-Chinese supply goes from 18% -> 39%. And that's before defence demand,which is the fastest-growing end market at 10.8% CAGR. This is why this isn't aspike. It's a supercycle.

The NDAA legallymandates non-Chinese tungsten for defence. China's export ban physicallyenforces it on everyone else. The result is the same. ALL Western demand,defence and commercial, funnels into the same two producers.

Even if Irande-escalates tomorrow and defence urgency fades, $TSM still runs9.6M wafers a month. $NVDAstill needs tungsten hexafluoride for every CVD chamber. $ASML'scustomers still need PVD sputtering targets. The AI buildout doesn't stopbecause a ceasefire gets signed.

The demand flooris structural, not cyclical. That has never existed before in tungsten'shistory. This is the first tungsten supercycle not because of war, but becausewar and AI collided in the same supply chain at the same time.

So where doesthe West actually get it? There are only two Western producers at meaningful scale:

• $EQR.AX ->3,000-4,000t/yr (Mt Carbine, Australia + Barruecopardo, Spain)

• $ALT ->5,300t/yr (Sangdong, South Korea + Panasqueira, Portugal)

Combined that'sroughly 50-70% of all non chinese tungsten output. EQR: 21-29% of Westernsupply (A$1.8B MC) ALT: 30-35% of Western supply ($4.4B MC)

That's the entireNDAA-compliant supply base for $LMT, $RTX, $NOC, $GD, Anduril, andevery defence prime such as $RHM.DE and $BA.L. And it'snot just the US. Europe imports 31% of its tungsten from China and... China hasalready cut them off.

The EU CriticalRaw Materials Act lists tungsten as both critical and strategic. $BA, $RHM, $LDO, $HO, the entireNATO industrial base is competing for the same Western supply. The NDAA is thelegal deadline. China's export ban is the physical one. Both point to the sametwo producers.

Same structure as$AXTI /Sumitomo before the InP re-rate. These companies were rated as boring materialminers. Now they are in the middle of the largest two capexes in the world.AXTI did 1,000% in a year on thesis recognition. Then 4x'd in 3 months when thesupply squeeze became undeniable. T

ungsten is thedensest practical metal on earth. No substitutes in:

•Armour-piercingrounds

•Kinetic energypenetrators -> Javelin, TOW, every modern anti-tank munition

•Missilecomponents and counterweights in fighter jets

•Machine toolingthat manufactures the ammunition itself

This EXACTSITUATION has happened before. During the Korean War the US cut off Chinesetungsten and scrambled to stockpile from allied producers. Tungsten traded at0.62% of the gold price. The US sent government engineers to develop theSangdong mine in South Korea and agreed to buy ALL tungsten produced.

73 years later $ALT justrestarted that exact same mine. Same deposit. Same geopolitical driver. Todaytungsten trades at 0.23% of gold. That's a third of the Korean War ratio.

APT at $2,250/MTU(Fastmarkets weekly benchmark) with spot transactions hitting $3,000/MTU.Korean War equivalent at today's gold price: $8,000/MTU. -> +166% from herejust to match a ratio from 1952. Gold is already pricing in the world thatmakes tungsten strategically critical. Tungsten hasn't caught up. This isn'ttheoretical. It's happening in real-time.

APT prices havegone from $863/MTU in late December to $3,000/MTU spot last week. +248% in 12weeks. The weekly gains not decelerating. (Up another $150/MTU (+7%) this weekalone) And the Chinese domestic market is now diverging from the Westernmarket. SMM reported on March 14 that Chinese downstream buyers are going onstrike three mine auctions failed in the same week as buyers resist recordprices. Meanwhile Western spot hit $3,000/MTU the same day.

Two separatemarkets are forming. A Chinese domestic market where buyers can push back. Anda Western NDAA-compliant market where defence primes have no alternative andwill pay whatever it takes before January 2027. $EQR and $ALT sell intothe second one.

TLDR: a biddingwar between hyperscalers with infinite capex and governments with infinitemoney print for defence across the entire NATO alliance. For a materialcontrolled by two Western producers. Even as of today, China has refused U.Srequest to help the Strait of Hormuz, further de-coupling.