Tool Manufacturers Strengthen Supply Chains as Tungsten Prices Surge

China's tighter export controls on tungsten are sending shockwaves through the global cutting tool industry. As prices for the critical raw material continue to soar, manufacturers are raising prices, reviewing product strategies, investing in recycling, and strengthening supply chain resilience to reduce long-term sourcing risks.

This development comes as the global machine tool industry is recovering on the back of robust investment in AI and semiconductor manufacturing. Japan's machine tool orders are forecast to reach ¥2 trillion in 2026, reflecting a new growth cycle driven by semiconductor and data center demand. 

Japan, June 10, 2026 — The cutting tool industry is accelerating efforts to strengthen its supply chains following a sharp rise in tungsten prices, driven by China's tighter export controls on critical minerals. As tungsten is an essential raw material for cemented carbide cutting tools, manufacturers are facing significantly higher production costs and are responding with price increases, product portfolio adjustments, and expanded recycling initiatives.

Tungsten Becomes a Strategic Material

Tungsten is a key ingredient in the production of cemented carbide, widely used in cutting tools such as inserts, end mills, drills and wear-resistant tooling for precision metal machining.

China accounts for approximately 80% of global tungsten production, making its export policy highly influential on worldwide supply.

The price of Ammonium Paratungstate (APT)—the primary intermediate material used in cemented carbide production—has surged to around ten times its level at the beginning of 2025, placing unprecedented pressure on cutting tool manufacturers.

Manufacturers Raise Prices and Review Product Strategies

The cost surge is already prompting strategic actions across Japan's cutting tool industry.

DIJET Industrial has announced that it will discontinue production of certain cemented carbide round bars and carbide plates after deciding not to replace aging production equipment under the current cost environment. The company will also raise prices for some cutting tools by up to 60%, acknowledging that even these increases may not fully offset rising raw material costs.

Meanwhile, NISSIN Tool plans its first price increase in approximately four years after inventories of lower-cost tungsten materials purchased previously begin to run out.

Developing Alternative Materials and Improving Material Efficiency

Beyond raising prices, manufacturers are accelerating efforts to reduce tungsten consumption.

Kyocera has confirmed that it will maintain its full product lineup while introducing cutting tools that require less tungsten, helping customers mitigate rising costs.

ISCAR Japan stated that its tungsten procurement remains stable and that both standard and custom-made products will continue to be supplied without disruption, despite planned price revisions.

DIJET Industrial is also promoting wider adoption of indexable cutting tools, which allow users to replace only the insert rather than the entire tool, reducing material consumption and lowering overall tooling costs.

The company is further evaluating a potential business partnership with Fuji Die to commercialize cemented carbide materials containing less tungsten.

Recycling Emerges as a Key Supply Chain Strategy

Major manufacturers including Mitsubishi Materials, Sumitomo Electric Industries, and Kyocera are expanding carbide recycling capacity to reduce dependence on imported raw materials.

The Ministry of Economy, Trade and Industry (METI) is supporting these initiatives through subsidies and economic security programs designed to strengthen domestic supply chains for critical minerals.

Meanwhile, the Japan Machine Tool Builders' Association (JMTBA) has revised its recycling guidelines to discourage carbide scrap from leaving Japan, as overseas buyers continue offering higher prices for recycled materials.

Supply Chain Resilience Becomes a Competitive Advantage

Industry analysts believe the current tungsten shortage highlights the growing strategic importance of critical minerals across advanced manufacturing.

Rather than competing solely on product performance, cutting tool manufacturers are increasingly differentiating themselves through secure raw material sourcing, recycling capabilities, alternative material development, and resilient supply chain management.

As geopolitical uncertainty continues and global demand for advanced manufacturing expands, supply chain resilience is expected to become one of the industry's most important competitive advantages.

Source: Nikkan Kogyo Shimbun