US tungsten market participants are seeking clarity on the scope and implementation of new export controls, warning that limited domestic processing capacity could leave scrap stranded in the country, pressure prices, and blunt the policy’s near-term impact. The US Bureau of Industry and Security (BIS), part of the Department of Commerce, requires domestic sellers of tungsten waste and scrap to allocate 100pc of their monthly sales to US buyers for one year starting on 27 August. The order also restricts exports of black mass, the shredded material produced from used lithium-ion batteries that can contain lithium, nickel, cobalt, and other recoverable metals. The measure is intended to retain critical-mineral-bearing waste in the US, support national defense supply chains, and encourage investment in domestic recycling and refining. But while the country generates substantial quantities of recoverable scrap, it does not yet have enough capacity to process all the material currently exported.
For tungsten, that mismatch could create an immediate domestic surplus. “This scenario is a death sentence for exporters,” one trader said. Another exporter said the requirements would fundamentally “change the way we do carbide business,” forcing companies to adjust their purchasing and sales strategies for at least the next year.
Many US tungsten scrap dealers depend heavily on Asian and European customers. US exports of tungsten waste and scrap reached 2,183 metric tonnes during January-June 2026, almost matching the 2,202t exported during all of 2025. Japan, Germany, and South Korea were the largest destinations during the first half of the year.
Keeping those volumes in the US could increase the supply of tungsten carbide inserts, rounds, and other hard scrap for domestic processors. But most large processors already have adequate inventories and are operating close to their maximum capacity, limiting their need for additional purchases. Market activity has consequently slowed ahead of the controls. Buyers and sellers are mostly holding off as they assess how BIS will administer the requirements and whether exporters will qualify for exemptions.
Only a few exporters reported spot purchases of less than 10,000 lb last week, largely to fulfill existing orders before the controls take effect. Most have avoided taking on additional material. The slowdown is expected to place further pressure on domestic carbide scrap prices. Argus last assessed US tungsten carbide inserts and rounds at $28-34/lb FOB US processor on 31 July, their lowest levels in 2026. Prices fell by 13pc and 12pc, respectively, from the previous month. Further declines are possible if scrap continues to enter the market without sufficient processing or export outlets.
Although the order effectively establishes export controls, companies can request adjustments or exemptions on a rolling basis. Case-by-case waivers will be issued if applicants demonstrate undue hardship or irreparable harm. Several market participants expect that approvals will focus on material shipped overseas for processing and refining before the recovered tungsten units return to the US. Such arrangements could allow the country to retain access to the metal while relying temporarily on processing infrastructure abroad.
Some industry sources therefore view the measure as a control mechanism rather than a complete export ban. Exports could continue where companies demonstrate that the material is not required immediately by domestic buyers or that the resulting tungsten will return to the US supply chain.
Waivers may be especially important because defense applications, while strategically significant, account for a relatively small share of the overall tungsten market. Defense represented about 10pc of global tungsten consumption in 2025, according to Argus Tungsten Analytics, while the automotive industry remained the largest demand sector. The US Defense Logistics Agency recently sought information on a possible future acquisition of up to 200t of tungsten hard scrap. Its 27 July request for information serves planning purposes and does not guarantee that a formal tender will follow.
The central question is whether the controls will come with enough funding to expand US processing. “With this measure, the US administration is working to foster the growth of processing capacity within the country,” said Joseph Miller, director at mining company Mission Critical Metals. “The interesting question will be whether funding from the Department of Defense or Department of Energy will be directed toward plant expansions or increasing capabilities within US industry, much as they have done in the rare earths, antimony, and tin sectors.” New facilities could take years to permit, finance, build, and commission. In the nearer term, existing processors are more likely to expand their plants than new entrants are to construct substantial greenfield capacity.
Tungsten recycler Amermin described the restriction as a useful but incomplete step. “This ban is a band-aid,” chief executive Ryan McAdams said. “It’s going to buy us more time, but we’ve got to start building up the infrastructure here stateside.” Amermin received an $11.5 mn Energy Department grant last year but has yet to receive the funds. According to McAdams, the company’s commercial recycling facility could have opened at least six months earlier if that financing had been available.
The battery-recycling sector illustrates the risks of retaining more feedstock without a viable downstream industry. US black mass production capacity accounted for about 9pc of the global total in the first quarter of 2026, according to Fastmarkets. At the same time, North American recyclers have faced significant financial pressure, with Ascend Elements and Li-Cycle entering bankruptcy proceedings. Restricting black mass exports may reduce feedstock availability for recyclers in South Korea and Southeast Asia. But it could also create excess material in the US unless domestic hydrometallurgical and refining capacity expands.
The tungsten and black mass restrictions form part of a wider US effort to reduce reliance on China, which dominates the processing of many minerals used in electric vehicles, electronics, precision tooling, and weapons systems. On 20 July, President Donald Trump signed an executive order limiting waivers that allow defense contractors to use critical materials sourced from China, Russia, North Korea, and Iran. From 1 January 2027, contractors must have approved plans to remove those materials from their supply chains, or the waivers will end.
A presidential determination issued on 30 July under the Defense Production Act classified recoverable critical materials, including tungsten scrap and black mass, as scarce and essential to national defense, giving the Commerce Department the basis to restrict exports. The administration has also announced more than $2 billion in mineral-related investments, including support for battery materials, scandium, rare-earth-free magnets, and refractory-grade bauxite. It is pursuing mineral-specific reference prices and potential price-floor arrangements with allies to protect new Western projects against market volatility and Chinese oversupply.
Tungsten is particularly important because it is used in armor, ammunition, cutting tools, aerospace components, and high-strength steel. China’s own controls on tungsten and other strategic minerals have reinforced concerns about US access to processed material. Yet keeping scrap inside the US addresses only one part of the supply chain. Without enough facilities to convert tungsten carbide scrap into intermediate and finished products, the policy risks creating a domestic processing bottleneck instead of reducing dependence on overseas feedstock.
In the short term, that is likely to mean weaker scrap prices, reduced purchasing, and pressure on exporters. Over the longer term, the measure could support a more resilient US tungsten industry, but only if export controls are paired with timely financing, plant expansions, and sufficient demand for the additional domestically processed material.