Capital Goods: Tungsten S/D mismatch to persist; benefits for SAND underappreciated

Research evidence excerpt

Capital Goods: Tungsten S/D mismatch to persist; benefits for SAND underappreciated

Equity Research

European Capital Goods

21 May 2026

Capital Goods

Tungsten S/D mismatch to persist;

benefits for SAND

European Capital Goodsunderappreciated

NEUTRAL

The market underestimates magnitude & duration of European Capital Goods

Vlad SergievskiiTungsten S/D imbalance; multi-year physical shortage with

no clear solution; China & Western prices to remain +44vlad.sergievskii@barclays.com(0)20 7116 1117

decoupled; Military recycling cycle much longer; Demand Barclays, UK

inelastic; Large integrated cutting tools OEMs (SAND) win George Featherstone, CFA

+44 (0)20 3555 8585

volume & margin. george.featherstone@barclays.com

Barclays, UK

Below we discuss key takeaways from our expert call with Michael Dornhofer, ex. executive at a Timothy Lee, CFA

SAND Tungsten subsidiary. We believe the market under appreciates potential benefits for +44 (0)20 7773 6879

vertically integrated SAND (OW), both in the short term (higher cutting tools and powder prices), timothy.lee@barclays.com

Barclays, UKand long run (more consolidated cutting tools industry). We see 10/15% upside to consensus

EBITA for SAND in 2026/27E, and reiterate OW rating with a SEK450 PT. Rajesh Patki

+44 (0)20 3555 5193

10 key takeaways from Tunsten expert call we hosted on the 18th of May: rajesh.patki@barclays.com

1) Physical shortage ex‑China: Western markets face a genuine physical shortage driven by

Madalena Azevedo

Chinese export restrictions, reduced mining quotas (again recently), weaker Vietnam supply,

+44 (0)20 7773 3616

and lack of mining projects outside China. madalena.amadogomesdeazevedo@barclays.c

om

2) China tightened both exports and domestic supply: With ~80% of global tungsten supply, Barclays, UK