Finance

The earliest depiction of the ouroboros—a serpent coiled in a circle, eating its own tail—was found in the tomb of Tutankhamun, a pharaoh who ruled Egypt around 1320BC. It was used in his funerary texts to depict the infinite nature of time, and later cropped up all over the place. In Ancient Rome it signified the seasonal cycle of the calendar year; in Norse mythology the snake was large enough to encircle the world. The idea is also an allegory for the modern financial system. It depicts how credit risk has been cycled out of banks, only to be gobbled up by them once more.After the global financial crisis of 2007-09, lawmakers in America and Europe penned new rules to govern finance. These had two aims. First, to force banks to hold more capital against their assets, so as to cushion losses. Second, to curb the risky activities in which banks had indulged. Some, such as proprietary trading, were prohibited; others were simply discouraged, sometimes by assigning higher “risk weights” to spicier assets. Both aims are measured by “common equity tier 1 capital” or cet1, which divides bank equity by asset value, adjusted for risk weights. More

China’s Ministry of Commerce said Thursday it hoped to reach an agreement soon with the European Union on the bloc’s planned tariffs for imported Chinese electric cars.
The EU started an investigation last year into the role of subsidies in China’s electric vehicle production.
The new energy vehicle industry, which includes hybrid and battery-only cars, has grown rapidly in China and automakers such as BYD have started to export the vehicles to Europe and other regions.

Employees work on the assembly line of electric vehicles in a digital automotive factory of Jiangling Motors on May 17, 2024. 
Vcg | Visual China Group | Getty Images

BEIJING — China hopes to reach an agreement with the European Union soon on the bloc’s planned tariffs for imported Chinese electric cars, the Ministry of Commerce said Thursday.
The European Commission announced in mid-June that if discussions with China did not go well, the bloc would start to impose additional duties on imported Chinese EVs on Thursday, July 4. “Definitive measures” would take effect four months after that date, according to a press release.

“We hope that the European side will work with China to meet each other halfway, show sincerity, speed up the consultation process, and, on the basis of rules and reality, reach a mutually acceptable solution as soon as possible,” Chinese Commerce Ministry spokesperson He Yadong told reporters in Mandarin, according to a CNBC translation.
He reiterated China’s opposition to the European Union’s anti-subsidy probe and pointed out the two sides still have a four-month window.

China’s Minister of Commerce Wang Wentao and European Commission Trade Commissioner Valdis Dombrovskis met virtually on June 22 to discuss the EU probe, according to the commerce ministry.
Spokesperson He said Thursday that the two sides had held multiple rounds of talks at a technical level, but he did not specify whether the talks were ongoing or had ended.
The EU started an investigation last year into the role of subsidies in China’s electric vehicle production. The new energy vehicle industry, which includes hybrid and battery-only cars, has grown rapidly in China and automakers such as BYD have started to export the vehicles to Europe and other regions.
The Chinese government spent $230.8 billion over more than a decade to develop its electric car industry, according to an analysis by the U.S.-based Center for Strategic and International Studies. More

The market for initial public offerings in Hong Kong is set to improve significantly over the next five years, said George Chan, global IPO leader at EY.
“I would say if the interest rate can be further cut down, 1 percent maybe, that would have a significant effect on the IPO market,” Chan said.
“Our HK cap markets team is very busy and has a strong pipeline for H2.  We expect to see many HKSE listings,” Marcia Ellis, global co-chair of private equity practice at Morrison Foerster in Hong Kong, said in an email Wednesday.

Hong Kong Exchanges and Clearing celebrates the 24th anniversary of its listing on June 21, 2024.
China News Service | China News Service | Getty Images

BEIJING — The market for initial public offerings in Hong Kong is set to improve significantly over the next five years, starting in the second half of this year, George Chan, global IPO leader at EY, told CNBC in an interview Wednesday.
“I think it will take a couple years to go back to the peak [in 2021] but the trend is there,” Chan said. “I can see the light at the end of the tunnel.”

High U.S. interest rates, regulatory scrutiny, slower economic growth and U.S.-China tensions have constrained Greater China IPOs in the last three years.
EY said in a report that while the volume of IPOs and proceeds in the U.S. increased significantly in the first half of 2024 compared to the same period a year ago, mainland China and Hong Kong saw a sharp decline in listings.
Many of the macro trends are now starting to turn around, which can support more IPOs in Hong Kong, said Chan, who is based in Shanghai.
“We are seeing a reversing trend,” he told CNBC. “We are seeing more of these [U.S. dollar] funds, they are moving back to Hong Kong. The main reason is that Hong Kong has already factored in these uncertainties.”
The Hang Seng Index is up more than 5% year-to-date after four straight years of decline — which was the worst such losing streak in the history of the index, according to Wind Information.

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“Our HK cap markets team is very busy and has a strong pipeline for H2.  We expect to see many HKSE listings,” Marcia Ellis, global co-chair of private equity practice at Morrison Foerster in Hong Kong, said in an email Wednesday.
Many companies that were waiting for a listing in mainland China’s A share market have decided to switch to one in Hong Kong, she said. “Previously [China Securities Regulatory Commission] approval was slowing things down but recently our team has gotten CSRC approvals pretty quickly.” 
In June, China issued new measures to promote venture capital, and authorities spoke publicly about supporting IPOs, especially in Hong Kong. Investors and analysts said they are now looking at the speed of IPO approvals for signs of a significant change.
Chan said another supportive factor for Hong Kong IPOs is that many of the companies listed in the market are based in mainland China, where economic growth is “quite satisfactory.”
He expects consumer companies could be among the near-term IPO beneficiaries.
“As the economy slowly recovers, a lot of people in China are willing to spend,” he said, noting that was especially the case in less developed parts of the country.
Official national-level data have showed that retail sales are growing more slowly in China — up by just 3.7% in May from a year ago versus growth of nearly 10% or more in prior years.
Also significant for global asset allocation, the U.S. Federal Reserve and other major central banks are pulling back from aggressive interest rate hikes. High rates have made Treasury bonds a more attractive investment for many institutions instead of IPOs.
“I would say if the interest rate can be further cut down, 1% maybe, that would have a significant effect on the IPO market,” Chan said.
Hong Kong IPOs raised $1.5 billion during the first half of the year, a 34% drop from a year ago, EY said in a report released late last month. Back in 2021 and 2020, the Hong Kong Stock Exchange saw nearly 100 or more IPOs a year raising tens of billions of dollars, according to the report.
In comparison, mainland China IPOs raised $4.6 billion in the first six months of 2024 — a drop of 85% from the year-ago period, according to EY.

Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, said during a conference last week that so far this year, the Hong Kong exchange has received 73 new listing applications — a 50% increase compared to the second half of last year. She is not related to EY’s George Chan.
“The pipeline is building up nicely,” she said, noting about 110 IPOs in total are in line for a Hong Kong listing. “All we need is a set of good market conditions so these things get to launch and price nicely,” she added.

Improving post-IPO performance

“What we need is a strong pipeline,” EY’s Chan said. “We need an interested investor with the money to invest, and we need a good aftermarket performance.”
Hong Kong IPO returns are improving. The average first-day return of new listings on the Hong Kong stock exchange in the first half of 2024 was 24%, far more than the average of 1% in the same period last year, according to EY.
“The aftermarket performance of Hong Kong IPOs has been doing quite good compared to the past five years,” Chan said. “These things added together are projecting an upward trend for the Hong Kong market [in the] next 5 years.”
Chan said he expects the number of deals to pick up in the second half of 2024.

He said those will likely be medium-sized — between 2 billion Hong Kong dollars to 5 billion Hong Kong dollars ($260 million to $640 million) — but added he expects better market momentum in 2025.
Slowing economic growth and geopolitical uncertainty have also weighed on early-stage investment into Chinese startups.
Total venture funding from foreign investors into Greater China deals plunged to $19 billion in 2023, down from $67 billion in 2021, according to Preqin, an alternative assets research firm.
U.S. investors have not participated in the largest deals in recent years, while investors from Greater China have remained involved, the firm said in a report last month.

U.S. IPO outlook

As for IPOs of China-based companies in the U.S., EY’s Chan said he expects current scrutiny on the listings to be “temporary,” although data security rules would remain a hurdle.
In early 2023, the China Securities Regulatory Commission formalized new rules that require domestic companies to comply with national security measures and the personal data protection law before going public overseas. A China-based company with more than 1 million users must pass Beijing’s cybersecurity review to list overseas.
“As time goes on, when people are more familiar with the Chinese [securities regulator] approval process and they are more become comfortable with geopolitical tensions, more of the large companies … would consider [the] U.S. market as their final destination,” Chan said.
“When the time comes I think the institutional investors would be interested in these sizeable Chinese companies, as they pretty much want to make money.”
He declined to comment on specific IPOs, and said certain high-profile listing plans are “isolated incidents.”
Chinese ride-hailing company Didi, which delisted from New York in 2021, has denied reports it plans to list in Hong Kong next year. Fast-fashion company Shein, which does most of its manufacturing in China, is trying to list in London following criticism in the U.S., according to a CNBC report. More

One exchange-traded fund is betting on a U.S. manufacturing job resurgence.
Tema ETFs CEO and founder Maurits Pot is behind the American Reshoring ETF (RSHO) that focuses on industrials.

“Some will call it deglobalization. We’re in the early innings,” Pot told CNBC’s “ETF Edge” this week. “At the heart of it is job creation, manufacturing and reshoring — bringing back local manufacturing jobs.”
Pot’s firm launched the American Reshoring ETF in May 2023. Since its inception, the exchange-traded fund is up almost 37% as of Wednesday’s close.

Despite the strong performance, “ETF Edge” host Bob Pisani contends ETFs built around a theme often come and go.
However, Strategas’ Todd Sohn, who tracks the ETF industry, thinks investing in U.S. manufacturing is a sound strategy. He points to the industrial sector’s runway for growth after a vast reduction in size over the past three decades.
“If I am going to play the industrials in a thematic way, I like the route of going active,” the firm’s managing director said. “I do think there is staying power here as opposed to some of the fads we’ve seen in the thematic space — particularly those that are a little more tech and growth oriented.”

The American Reshoring ETF is underperforming the broader market over the past three months, falling more than 4%.
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Federal Reserve officials at their June meeting indicated that inflation is moving in the right direction but not quickly enough for them to lower interest rates.
Minutes released Wednesday showed that policymakers lacked the confidence they needed to lower policy, while they generally agreed there should be no rush to cut.

Federal Reserve officials at their June meeting indicated that inflation is moving in the right direction but not quickly enough for them to lower interest rates, minutes released Wednesday showed.
“Participants affirmed that additional favorable data were required to give them greater confidence that inflation was moving sustainably toward 2 percent,” the meeting summary said.

Though the minutes reflected disagreement from the 19 central bankers who took part in the discussion, with some even indicating a penchant toward raising rates if necessary, the meeting concluded with Federal Open Market Committee voters holding rates in place.
The Fed targets 2% annual inflation, a level it has been above since early in 2021. Officials at the meeting said data has improved lately, though they are want more evidence that it will continue.
Meeting participants “emphasized that they did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward the Committee’s 2 percent objective.”
At the meeting, policymakers also provided an update on economic projections and monetary policy over the next several years.
The FOMC “dot plot” showed one quarter percentage point cut by the end of 2024, down from the three indicated following the last update in March. Even though the dot plot indicated one cut this year, futures markets continue to price in two, starting in September.

Also, the committee largely left its economic projections intact, though they lowered their inflation expectations for this year.
In discussions over how they would approach monetary policy, the minutes reflected some disagreements. Some members noted the need to tighten the reins should inflation persist, while others made the case that they should be ready to respond should the economy falter or the labor market weaken.
“Several participants observed that, were inflation to persist at an elevated level or to increase further, the target range for the federal funds rate might need to be raised,” the minutes stated. “A number of participants remarked that monetary policy should stand ready to respond to unexpected economic weakness.”
The minutes do not identify individual members nor do they provide exact amounts for the number of officials expressing particular viewpoints. However, in the Fed parlance, “a number” is considered more than “several.”
The summary also noted a “vast majority” saw economic growth “gradually cooling” and that the current policy is “restrictive,” a key term as the officials contemplate how restrictive policy needs to be while bringing down inflation and not causing undue economic harm.
Since the meeting, officials have largely stuck to a cautious script stressing data dependency rather than forecasts. However, there have been indications from multiple officials, including Chair Jerome Powell, that continued encouraging readings on inflation would provide confidence that rates can be lowered.
In an appearance Tuesday in Portugal, Powell said the risks of cutting too soon and risking a resurgence in inflation against cutting too late and endangering economic growth have come more into balance. Previously, officials had stressed the importance of not backing off the inflation fight too soon. More

President Joe Biden and former President Donald Trump traded barbs about the U.S. economy during their first presidential debate.
Trump said Biden caused high pandemic-era inflation, which surged right after Biden took office.
Neither Biden nor Trump is to blame for much of the inflation, however, economists said: The Covid-19 pandemic, Russia’s war in Ukraine and Federal Reserve policy mishaps were beyond their control.
However, some of their policies likely played a role, too, economists said.

Former President Donald Trump, left, and President Joe Biden face off in the first debate of the 2024 presidential campaign, in Atlanta, June 27, 2024.
Andrew Harnik | Getty Images News | Getty Images

The recent U.S. presidential debate saw both candidates trade barbs related to the economy. High pandemic-era inflation was among the grievances.
“He caused the inflation,” Trump said of Biden during the June 27 debate. “I gave him a country with no, essentially no inflation,” he added.

Biden countered by saying inflation was low during Trump’s term because the economy “was flat on its back.”
“He decimated the economy, absolutely decimated the economy,” Biden said.

But the cause of inflation isn’t so black-and-white, economists say.
In fact, Biden and Trump are not responsible for much of the inflation consumers have experienced in recent years, they said.

‘Neither Trump nor Biden is to blame’

Global events beyond Trump’s or Biden’s control wreaked havoc on supply-and-demand dynamics in the U.S. economy, fueling higher prices, economists said.

There were other factors, too.
The Federal Reserve, which acts independently from the Oval Office, was slow to act to contain hot inflation, for example. Some Biden and Trump policies such as pandemic relief packages also likely played a role, as might have so-called “greedflation.”
“I don’t think it’s a simple yes/no kind of answer,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, a left-leaning think tank.
“In general, presidents get more credit and blame for the economy than they deserve,” he said.
More from Personal Finance:Trump may roll back student loan forgiveness programs if electedWhat a Supreme Court ruling could mean for Biden’s ‘billionaire tax’Biden, Trump accuse each other of ruining Social Security, Medicare
That Biden is seen as stoking high inflation is due somewhat to optics: He took office in early 2021, around the time inflation spiked notably, economists said.
Likewise, the Covid-19 pandemic plunged the U.S. into a severe recession during Trump’s tenure, pulling the consumer price index to near zero in spring 2020 as unemployment ballooned and consumers cut spending.
“In my view, neither Trump nor Biden is to blame for the high inflation,” said Mark Zandi, chief economist at Moody’s Analytics. “The blame goes to the pandemic and the Russian war in Ukraine.”

The big reasons inflation spiked

Inflation has many tentacles. At a high level, hot inflation is largely an issue of mismatched supply and demand.
The pandemic upended the typical dynamics. For one, it disrupted global supply chains.
There were labor shortages: Illness sidelined workers. Child-care centers closed, making it hard for parents to work. Others were worried about getting sick on the job. A decline in immigration also reduced worker supply, economists said.
China shut down factories and cargo ships couldn’t be unloaded at ports, for example, reducing the supply of goods.
Meanwhile, consumers changed their buying patterns.
They bought more physical stuff such as living room furniture and desks for their home offices as they spent more time indoors — a departure from pre-pandemic norms, when Americans tended to spend more money on services such as dining out, travel, and going to movies and concerts.

Cargo containers sit stacked on ships at the Port of Los Angeles, the nation’s busiest container port, in San Pedro, California, on Oct. 15, 2021.
Mario Tama | Getty Images News | Getty Images

High demand, which boomed when the U.S. economy reopened broadly, coupled with goods shortages fueled higher prices.
There were other related factors, too.
For example, automakers didn’t have enough semiconductor chips necessary to build cars, while rental car companies sold off their fleets because they didn’t think the recession would be short-lived, making it pricier to rent when the economy rebounded quickly, Wessel said.
As Covid cases were hitting record highs heading into 2022, further disrupting supply chains, Russia’s war in Ukraine “supercharged” inflation by stoking higher prices for commodities such as oil and food around the world, Zandi said.
As a result, global inflation hit a level “higher than seen in several decades,” the International Monetary Fund wrote in October 2022.
“We only have to look at the still high inflation rates in most other advanced economies to see that most of this inflation period was really about global trends … rather than about the specific policy actions of any given government (though they did of course play some role),” Stephen Brown, deputy chief North America economist for Capital Economics, wrote in an e-mail.

Big spending bills’ impact ‘only clear in hindsight’

However, Biden and Trump aren’t entirely without fault: They greenlit additional government spending in the pandemic era that contributed to inflation, for example, economists said.
For example, the American Rescue Plan — the $1.9 trillion stimulus package Biden signed in March 2021— offered $1,400 stimulus checks, enhanced unemployment benefits and a larger child tax credit to households, in addition to other relief.
The policy led to “some good things,” such as a strong job market and low unemployment, said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank.
But its magnitude was greater than the U.S. economy needed at the time, serving to raise prices by putting more money in consumers’ pockets, which fueled demand, he said.
“I do think President Biden bears some responsibility for the inflation that we’ve been living through for the past few years,” Strain said.

He estimated the American Rescue Plan added about 2 percentage points to underlying inflation. The consumer price index peaked around 9% in June 2022, the highest since 1981. It’s since declined to 3.3% as of May 2024.
The Federal Reserve — the U.S. central bank — aims for a long-term inflation rate near 2%.
“I think if it weren’t for the American Rescue Plan, the U.S. still would have had inflation,” Strain added. “So I think it’s important not to overstate the situation.”
However, Zandi viewed the ARP’s inflationary impact as “good” and “desirable,” bringing the economy back to the Fed’s long-term target inflation rate after a prolonged period of below-average inflation.
Trump had also authorized two stimulus packages, in March and December 2020, worth about $3 trillion.
These so-called “fiscal policy” responses were insurance against a lousy economic recovery, perhaps overshooting after the U.S.’ lackluster response to the Great Recession that mired the nation in high unemployment for years, Wessel said.
That the U.S. issued perhaps too much stimulus was the presidents’ fault but “only clear in hindsight,” he said.
Biden and Trump also enacted other policies that may contribute to higher prices, economists said.
For example, Trump imposed tariffs on imported steel, aluminum and several goods from China, which Biden largely kept intact. Biden also set new import taxes on Chinese goods such as electric vehicles and solar panels.

The Fed and ‘greedflation’

Fed officials also have some responsibility for inflation, economists said.
The central bank uses interest rates to control inflation. Increasing rates raises borrowing costs for businesses and consumers, cooling the economy and therefore inflation.
The Fed has raised rates to their highest in about two decades, but was initially slow to act, economists said. It first increased them in March 2022, about a year after inflation started to spike.
It also waited too long to throttle back on “quantitative easing,” Strain said, a bond-buying program meant to stimulate economic activity.
“That was a mistake,” Zandi said of Fed policy. “I don’t think anyone would have gotten it right given the circumstance, but in hindsight it was an error.”
Some observers have also pointed to so-called “greedflation” — the notion of corporations taking advantage of the high-inflation narrative to raise prices more than needed, thereby boosting profits — as a contributing factor.
It’s unlikely this was a cause of inflation, though it may have contributed slightly, economists said.
“To the extent anything like that happened — which I’m not sure it did — this would be a very minor factor in the inflation we had,” said Strain. He estimates the dynamic would have added well less than 1 percentage point to the inflation rate.
“Companies always look for an opportunity to raise prices when they can,” Wessel said. “I think they took advantage of the inflationary climate, but I don’t think they caused it.” More

JPMorgan’s Marko Kolanovic.
Crystal Mercedes | CNBC

A top strategist at JPMorgan who was caught offside by the stock market rally is quitting the investment firm.
Marko Kolanovic, who served as chief global markets strategist and co-head of global research, is leaving the bank to explore other opportunities, according to a source familiar with the internal announcement.

In his place, Hussein Malik will become the sole head of global research, and Dubravko Lakos-Bujas will serve as chief markets strategist.
Kolanovic rose to prominence among market watchers for correctly predicting a stock market rebound in the middle of the Covid-19 pandemic. But he has been consistently bearish over the past two years as the market has reached new highs.
JPMorgan’s current year-end prediction for the S&P 500 is 4,200, while no other major firm in the CNBC Market Strategist Survey is below 5,200. JPMorgan’s prediction is officially credited to Lakos-Bujas, who worked under Kolanovic.
The S&P 500 is up more than 15% this year and closed above 5,500 on Tuesday.
News of Kolanovic’s departure was first reported by Bloomberg News.

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Tungsten is nearly as hard as diamond and has a high energy density, making it an important material in weapons, autos, electric car batteries, semiconductors and industrial cutting machines.
Chipmakers TSMC and Nvidia both use tungsten.
While the Biden administration raised tariffs on imports of tungsten in May, China this past weekend did not include the metal in new regulations for boosting its oversight of domestic rare earths production.

Pictured here is a stone with tungsten ore inside a mine in Germany run by Saxony Minerals and Exploration.
Picture Alliance | Picture Alliance | Getty Images

BEIJING — China dominates the supply chain for many of the world’s critical minerals, but so far it’s held off on sweeping restrictions on at least one: tungsten.
The metal is nearly as hard as diamond and has a high energy density. That’s made tungsten an important material in weapons, autos, electric car batteries, semiconductors and industrial cutting machines. Chipmakers such as Taiwan Semiconductor Manufacturing Company and Nvidia both use the metal.

“I don’t expect any saber-rattling over tungsten,” said Lewis Black, CEO of Canada-based Almonty Industries, which is spending at least $75 million to reopen a tungsten mine in South Korea later this year.
“If you get too belligerent about diversification, [it becomes a situation that’s] biting the hand that feeds you,” he said, adding that “tungsten has always been a diplomatic metal.”
While the Biden administration raised tariffs on imports of tungsten in May, China this past weekend did not include the metal in new regulations for boosting its oversight of domestic rare earths production.

But China might not be too concerned, because the Chinese government ignored the new tariffs… They completely ignored it because the Chinese don’t want tensions to rise.

Lewis Black
CEO of Almonty

“The tariffs were more of a warning shot, as Biden only put tariffs on three of the 25 strategic metals China exports,” Black said.
“But China might not be too concerned, because the Chinese government ignored the new tariffs, unlike in the past when they restricted some exports of rare earths. They completely ignored it because the Chinese don’t want tensions to rise.”

Asked last month if China would retaliate to the latest U.S. tariffs on tungsten, China’s Ministry of Commerce spokesperson He Yadong didn’t announce countermeasures. Instead, he called on the U.S. to remove the additional duties.
Commodity price reporting and analytics company Fastmarkets pointed out earlier this year that China has reduced national production quotas for its tungsten mines due to environmental restrictions.

Diversifying away from China

Still, Black expects his company to benefit from growing efforts to diversify away from China. Almonty claims the forthcoming mine in South Korea has the potential to produce 50% of the world’s ex-China tungsten supply.
Demand for non-Chinese tungsten is already on the rise.
“We see in the U.S., in Europe, they ask their suppliers for a China-free supply chain,” said Michael Dornhofer, founder of metals consulting firm Independent Supply Business Partner.

The U.S. REEShore Act — or Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022 — prohibits the use of Chinese tungsten in military equipment starting in 2026, while the European Commission last year extended tariffs on imported Chinese tungsten carbide for another five years, Almonty Industries pointed out in a report.
The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party last month announced a new working group on the U.S. critical minerals policy.

Soaring tungsten prices

Expectations for higher demand and limited supplies of tungsten have pushed prices to multi-year highs, although they have tapered off in the last several weeks.
Dornhofer said in an interview in late May that he was also seeing Chinese buyers increasing their tungsten purchases.
“Since the beginning of this year, they are not only asking for Western concentrate, but they are buying significant volumes, paying even more than Western companies are willing to pay,” he said. “Definitely [going to be] a game changer.”

Back in January, U.S.-based research firm Macro Ops said: “We’re approaching an inflection point in tungsten supply. The US will quickly run out of stockpiled tungsten and flip from net seller to buyer over the next 12-18 months.”
The U.S. Bureau of Industry and Security at the Department of Commerce did not immediately respond to a CNBC request for comment on this story.
Brandon Beylo, head of investment research at Macro Ops, told CNBC in an email there are only six companies in the U.S. with capacity to produce tungsten. He added that the U.S. hasn’t produced tungsten domestically since 2015, meaning future U.S. supply must come from overseas.
He said the firm doesn’t own tungsten-related stocks, but that he’s personally looking for ways to access the physical commodity. There are no futures for trading tungsten.

Other tungsten players going to South Korea

China dominates over 80% of the tungsten supply chain, although local production costs are rising as the mines age, according to Argus, noting Chinese imports of the metal from North Korea, central Africa and Myanmar.
“This presents an opportunity for projects outside China,” Mark Seddon, principal, consulting and analytics at Argus, said in a June 28 webinar.
Other non-Chinese companies in the tungsten supply chain are going to South Korea.
In February, IMC Endmill, an affiliate of Warren Buffett-owned IMC Group, signed an agreement with the Daegu city government for a 130 billion Korean won ($93.6 million) investment in a tungsten powder manufacturing facility, according to a local news report.
IMC Group did not immediately respond to CNBC’s request for comment.

China’s dominance in global critical minerals supply chains has been built up over several decades.
Dornhofer pointed out that efforts to produce tungsten outside of China have languished for years, including plans for a mine in New Brunswick, Canada, that would have significantly increased global tungsten capacity.
All these projects have been on the table since 20 years ago, he said. “When people tell you in two years, three years they will be in operation, it’s a question of whether you believe them. On the other [hand], the tungsten is in the ground. It’s still there.”
Almonty claims to be the biggest producer of tungsten outside China and right now, primarily operates in Portugal and Spain. The forthcoming mine in Sangdong, South Korea, closed in the 1990s.
After the mine reopens later this year, Black expects his company will account for only 7% or 8% of global tungsten supply.
“We’re not crowding out any Chinese,” he said. “We don’t intend to.”
“Now if we’re going to produce 30% to 40%, I’m taking a battle with China, which wouldn’t be a smart thing to do.” More