Almonty’s tungsten mine in Sangdong, South Korea, in March 2026.
Almonty
BEIJING – The Iran war is straining a global commodities market already under pressure from China’s export controls and storage efforts.
Prices for three niche elements – tungsten, sulfur and helium – have risen sharply in recent weeks.
Although neither commodity trades as heavily as oil, the rise suggests that the impact of the Middle East conflict could ultimately lead to a curtailment of production of semiconductors that drive advances in artificial intelligence.
Tungsten, a metal almost as hard as diamond, makes the electrical connection at the core of a semiconductor chip. Sulfuric acid, a byproduct of sulfur, cleans chip wafers. Helium enables smooth production of semiconductors because the gas prevents unwanted chemical reactions in the manufacturing process.
These are just a few examples of how the three elements have become crucial to modern manufacturing, including defense.
Beijing began tightening its control over critical supplies even before the Iran war began on February 28, partly as tensions with the US escalated in recent years.
China began restricting tungsten exports just over a year ago and called for tighter restrictions on sulfuric acid exports in December. According to Wind Information, the volume of Chinese imports of helium, a gas that is difficult to store, rose 15.7% in 2025 after rising nearly 65% in 2024.
The Iran War and resulting restrictions on the Strait of Hormuz, a key shipping route for energy and chemicals in the Middle East, have turned some oversupply situations into undersupply while exacerbating existing shortages.
The prices for the three raw materials have sometimes risen more sharply than those for oil. The widely used fossil fuel rose more than 50% in March, putting Brent on track for a record month.
“While the Chinese supply chain is viewed as more resilient than many competitors, the risk of disruption in raw materials chemicals for manufacturers in select segments is higher than expected based on feedback.” Goldman Sachs analysts said in a report late last week, citing nearly 40 commodity-related meetings and field visits in China.
tungsten
Wolfram hit a record high of over $3,000 late last week, up well over 50% for the month and more than tripling its price since late December. This is based on the industry benchmark called “Ammonium Paratungstate (APT)” in Metric Ton Units (MTU) from Fastmarket as stated by Tungsten Miner Almonty.
Almonty officially reopened a large tungsten mine in Sangdong, South Korea, earlier this month and plans to begin producing tungsten at a project in the US state of Montana later this year.
The company’s CEO, Lewis Black, told CNBC that demand for tungsten in the defense sector has been “extremely strong” since the beginning of last year, but there have been no significant changes despite the Iran war.
“There’s no material to store. That’s probably the biggest change,” he said.
sulfur
The price of sulfuric acid in Africa is now at least 30% higher than before the war and continues to rise, Goldman Sachs analysts said, citing a local Chinese miner in Africa.
Other estimates point to a more moderate price increase.
Sulfur prices in China, including costs and freight, rose about 13% since the beginning of March to $621 a ton on March 26, according to S&P Global Platts.
“A two- to three-month effective blockade would likely result in a severe supply shock, particularly as freight/insurance remains elevated and Middle East cargoes become more difficult to turn around,” Pan Yuya, senior analyst for sulfur and phosphate commodities at S&P Global Energy, and Isaac Zhao, senior principal analyst for China fertilizers at S&P Global Energy, said in a March 20 note.
S&P analysts said that in 2025, around 56% of China’s sulfur imports would come from the Middle East.
“Even before the Middle East conflict, sulfur prices were rising sharply as the market tightened. With sulfur prices now reaching new record highs, the ‘super-shortage’ of this more obscure commodity in supply warrants further investigation,” HSBC analysts said in a March 16 report.
helium
According to Fitch Ratings, helium prices have roughly doubled since the start of the Iran War.
Because most trading occurs through long-term private contracts between industrial gas suppliers and producers, it is difficult to set industry-wide prices, said Shelley Jang, Fitch director of corporate ratings in Asia Pacific.
Iranian missile attacks this month crippled a key industrial center in Qatar that produces about a third of the world’s helium.
This means helium supplies will not be restored any time soon, emphasized Christopher Ecclestone, director and mining strategist at Hallgarten & Company.
According to Wind Information, helium prices in China’s Henan province have reversed their decline this year, rising to 600 yuan (US$86.81) per bottle from a Feb. 28 low of 545 yuan ($78.85) per bottle.
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Shortages caused by the Iran war are the latest supply chain disruption to rattle global markets, which faced similar shocks from Russia’s invasion of Ukraine in 2022 and the Covid-19 pandemic. That has prompted companies to diversify and countries like China to ramp up their stockpiling plans.
“Access to supplies of certain physical materials when production and processing are concentrated in China will be a more frequent subject of negotiations with Beijing,” Rhodium Group said in a March 24 report.
Limited price transparency also means the shortage could be worse than available figures suggest.
Prices for tungsten and helium have skyrocketed, “but there’s no one on the buying side saying, ‘Oh my God, we don’t have enough product,'” Ecclestone said. “Defense contractors should have stockpiles of tungsten, but they don’t.”
“The world has become lazy. It thinks life is like a supermarket, that the product is a box of cornflakes or a few tons of sulfuric acid,” he said. “Some aisles in the produce supermarket were torn down.”
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