Tungsten is considered a minor metal in terms of its market size but there is no doubting its critical and strategic qualities.

It’s critical because it has the highest melting point of all metals (3410°C) and is the hardest of all metals, giving it wide-ranging uses in the aerospace and defence industries, mining equipment, construction and

It’s strategic because China controls about 80% of global supply, with Beijing recently “weaponising”  the metal through export controls in its tit-for-tat trade war with the Trump administration.

A fresh angle underpinning the metal’s outlook is the recognition by the EU and the UK that there is an urgent need to spend billions on rearming their defence forces because of concerns the US is no longer intending to live up to its NATO obligations.

Tungsten comes into its own in such war-footing scenarios given its armour-piercing capabilities.

All that has been reflected in prices for the intermediate tungsten product (APT) rising 13% in the last 12 months in US dollar terms, and 17% in Aussie dollar terms due to the exchange rate effect.

Strangely though, the few tungsten players on the ASX have not exactly had a rocket put under their share prices. It is a different case overseas where listed tungsten developers/producers in the UK and North America have been powering ahead.

ASX tungsten producers

That includes the Toronto-based Almonty Industries, which is listed on the ASX under the code AII.

A producer in Spain and Portugal and a developer, Almonty is up 240% in the 12 last months. A UK listed company looking to develop a tungsten mine in Nevada, Guardian Metal Resources (LON:GMET), is up by 156%.

There seems to be a greater appreciation in overseas markets on how the dynamics around tungsten are changing and why it is becoming more important to secure long-term non-China supplies.

Having said all that, Australia has a national champion in tungsten – the ASX-listed EQ Resources (ASX:EQR).

The rest of the non-China world has just endorsed that mantle by signing five offtake agreements for supply from its Mt Carbine mine, an easy drive from Port Douglas, and its Barruecopardo mine in Spain’s Salamanca province.

At current prices the offtake contracts have an estimated value of $US124 million. The allocations to three unnamed but top three producers of various tungsten products means that EQR’s production is now covered for the next 24 months.

While unnamed, the offtakers were said to be North American and European consumers, with EQR saying that was significant given the recent export stop on a variety of tungsten products from China.

“The recent move by China to more closely regulate the export of tungsten products has certainly triggered more interest in locking in volume supply of tungsten raw materials,” the  company said.

It said the February move by China to closely regulate their export had led to a complete halt of exports of a majority of tungsten products.

National champion in tungsten for sure. But at a share price of 4.4c a share, EQR’s market cap is a little more than $100m.

While it stands to benefit from the non-China world coming knocking on the door for supplies, it is also working its way through becoming a bigger producer from its mines, as well a move into value-added downstream processing by acquiring an operation in Vietnam.

Morgans follows the stock and has its price target  under review following the news on the offtake agreements. It previously had a 13c share price target on the stock.