Tungsten & Rare Earth: Supply-Demand Mismatch Under Quota Restrictions

English summary

Tungsten and rare earth are China's only two advantageous metals under mining quota management, with export controls opening up space for domestic substitution. China holds outstanding resource advantages in both: tungsten reserves account for over 53% of the global total and output nearly 80%; rare earth reserves account for 48.9% and output 69.2%. Combined with a complete deep-processing industry chain, these form unique resource barriers for China's key metals. Since 2025, mining quotas for tungsten and rare earth have been tightened, increasing supply-side tension. The Ministry of Natural Resources lowered the first batch of 2025 tungsten mining output indicators and strictly controlled over-quota and no-quota production, keeping raw material supply tight. Rare earth is under joint control by MIIT, MNR, and NDRC, with highly restrained quota increases in recent years, especially near-zero growth for medium and heavy rare earth. Tightening raw material exports raises overseas supply disruption risks, opening substitution space for domestic materials.…