Analysis of the Continuous Price Rise of Cemented Carbide Tools

Abstract

Since early 2025, global prices of cemented carbide tools have been rising continuously and hitting record highs frequently. Driven by the sharp surge in raw material costs, tight supply, strong downstream demand and policy control, the price increase has spread across the entire industrial chain, forcing tool manufacturers to raise prices repeatedly.

This paper analyzes the core drivers behind the price surge, assesses its impact on the industrial chain, and predicts the future price trend.

1. Introduction
Cemented carbide tools, known as the "teeth of industry", are essential consumables for precision machining in auto parts, aerospace, 3C electronics, mold manufacturing and other fields. They account for only 1%–4% of total machining costs but determine processing efficiency and product quality. Since 2025, the industry has witnessed an unprecedented round of price hikes. Leading manufacturers have issued multiple price-adjustment notices, with cumulative increases of 15%–60% for standard products and even higher for high-end precision tools. This round of price rise is not a short-term fluctuation but a structural shift caused by the reconstruction of supply and demand in the tungsten industry chain.

2. Core Drivers of Price Increase

2.1 Skyrocketing Prices of Core Raw Materials
Tungsten powder, tungsten carbide powder and cobalt powder are the basic materials of cemented carbide, accounting for 60%–80% of the total production cost of tools.
Tungsten powder rose from about 316 CNY/kg in early 2025 to 1,800 CNY/kg by February 2026, a surge of 470% within just over one year.
Tungsten carbide powder increased by nearly 300% in the same period.
Cobalt, as a key binder, rose by more than 200% due to supply disruptions in the Democratic Republic of the Congo.
The cost surge has been directly passed downstream, becoming the most fundamental reason for tool price increases.

2.2 Supply Contraction at the Upper Reaches
Global tungsten resources are highly concentrated, with China supplying more than 80% of the world’s output.
The Chinese government has tightened the total annual mining quota of tungsten concentrate, with a year-on-year reduction of about 6.5% in 2025.
Stricter environmental protection and safety inspections have shut down a large number of small and irregular mines.
Export controls on tungsten-related products have been upgraded, reducing global supply availability.
Industry inventories are at historically low levels, and many enterprises have less than 15 days of raw material stock, far below the 30-day safety line.
The rigid supply shortage supports high raw material prices.

2.3 Strong and Resilient Downstream Demand
Demand for cemented carbide tools remains robust despite price increases:
Rapid growth in new energy vehicles, aerospace, robotics and precision molds has boosted demand for high-performance tools.
Tool consumption is rigid in industrial production; the small proportion in total costs makes end users less sensitive to price.
Global manufacturing recovery and capacity expansion further lift consumption.
Strong demand prevents price corrections and reinforces the upward cycle.

2.4 Rising Comprehensive Operational Costs
In addition to raw materials, other costs have risen markedly:
Energy prices and logistics costs remain high worldwide.
Labor costs and R&D investment in high-end tools continue to increase.
Small and medium-sized manufacturers face financing difficulties and reduced production efficiency.
These factors further push up the final product prices.

3. Industry Impact and Structural Changes

3.1 Frequent Price Adjustments by Tool Enterprises
Leading tool companies have implemented 3–5 rounds of price increases since late 2025, with adjustments ranging from 10% to 25% each time. International brands such as Seco Tools and domestic leaders including Zhuzhou Cemented Carbide Cutting Tools and Huirui Precision have all joined the price hike wave.

3.2 Industry Consolidation and Clearance
Large enterprises with raw material stockpiling, scale effects and stable supply chains maintain stable delivery and profitability.
Many small and medium-sized factories suspend production due to lack of raw materials, leading to industry concentration improvement.
The market shifts from price competition to competition in technology, quality and supply stability.

3.3 Passive Cost Bearing by Downstream Manufacturers
Although tools account for a small share of total costs, continuous price increases have raised processing costs for automotive, mold and machinery enterprises, which in turn squeeze their profit margins.

4. Future Price Trend Outlook
In the short to medium term, prices of cemented carbide tools will remain high and fluctuate upward for three reasons:
Tungsten mining and smelting cycles are long (3–5 years), and new supply is difficult to launch quickly.
Strategic positioning of tungsten resources will keep policies tight, suppressing supply growth.
Downstream demand from high-end manufacturing will continue to grow, supporting rigid consumption.
Prices are unlikely to drop sharply in 2026. Instead, they will stay at high levels with periodic adjustments.

5. Conclusions and Suggestions
The continuous price rise of cemented carbide tools is a comprehensive result of raw material cost surges, supply contraction, strong demand and policy controls. It has promoted industry upgrading and concentration while bringing cost pressure to downstream manufacturing.

For enterprises:
Manufacturers should optimize raw material procurement, lock in costs through long-term contracts and stockpiling.
Develop high-efficiency and long-life tools to reduce customer usage consumption.
Promote recycled tungsten and alternative materials to ease resource dependence.

For downstream users:
Choose high-performance tools to improve processing efficiency and offset cost increases.
Establish long-term cooperative relationships with stable suppliers to ensure supply security.

In the long run, the industry will move toward high-endization, intensification and green recycling, and price stability will gradually return as supply and demand rebalance.