By Townhall News Editorial Board
CME Group announced on Oct. 19 that it will launch tungsten futures contracts by early 2027, creating the first exchange-traded forward market for a metal the United States, the European Union, Japan and India all classify as critical. The move by the Chicago-based derivatives giant is more than a product rollout. It is a practical demonstration that transparent, market-based tools can do what billions in federal subsidies have struggled to accomplish: give American manufacturers and defense suppliers a reliable way to manage the risks of a supply chain dominated by a strategic adversary.
The case for paying attention is straightforward. China mines roughly 80 percent of the world’s tungsten and refines about 85 percent of its key intermediate chemical, ammonium paratungstate, according to S&P Global data cited in a recent Defense Profile analysis. The United States has not mined tungsten commercially since 2015. When Beijing imposed export licensing on tungsten products in February 2025, prices surged. The Fastmarkets benchmark for Rotterdam APT rose from about $331 per metric ton unit at the start of 2025 to an all-time high near $3,140 in May 2026, according to U.S. Geological Survey figures cited in the same analysis.
That price spike illustrates why a futures market matters. Without forward pricing, American manufacturers who depend on tungsten for cutting tools, drill bits, armor-piercing rounds and semiconductor components have no standardized way to lock in costs or plan budgets. “For our manufacturing clients, tungsten is essential to production but has been difficult to budget for without a forward market,” Maarten Gassmann, managing director of metals trading firm Grondmet, said in CME Group’s Oct. 19 news release. The new contract, financially settled against the Fastmarkets APT assessment on the COMEX exchange, fills that gap.
Washington’s instinct over the past two years has been to reach for industrial policy. The Pentagon committed $450 million to Maine-based Elmet Group in September to build domestic tungsten refining capacity, a deal that included warrants for up to 19.9 percent of the company, according to Defense Profile. Starting Jan. 1, 2027, defense contractors will be barred from delivering tungsten products mined or refined in China, Russia, Iran or North Korea. These steps address real vulnerabilities. Yet the new Elmet APT plant is not expected to begin production until the second half of 2028, and government equity stakes in private suppliers raise legitimate questions about market distortion and taxpayer risk.
CME Group’s approach operates on a different principle. A futures market does not require taxpayer dollars, does not pick winners among producers and does not depend on a single plant’s construction timeline. It creates price transparency that benefits every participant in the supply chain. “Having transparent forward pricing will support reliable, long-term western supply chains,” Quentin Lamarche, CEO of TechMet SCM, said in the same news release. CME Group’s metals business traded an average of 1.2 million contracts daily in the first nine months of 2026, up 41 percent year-over-year, according to the company. That liquidity gives the tungsten contract a credible ecosystem from day one.
Critics will note, fairly, that a futures contract does not create a single new mine or refinery. Price discovery alone will not break China’s physical grip on the tungsten supply chain. Direct government investment in domestic capacity may be necessary in the short term, particularly for defense applications where supply disruption is a national security risk rather than merely a commercial inconvenience. That concession is warranted.
But the broader lesson from CME Group’s announcement deserves emphasis. Economic security policy works best when it harnesses market mechanisms rather than replacing them. Subsidies can accelerate supply, but only transparent pricing gives producers, consumers and investors the confidence to commit private capital at scale. The global tungsten market exceeds $20 billion annually, according to CME Group. Unlocking even a fraction of that value through efficient hedging and price discovery will do more to attract western mining and refining investment than any single government grant.
Chicago should take note. One of the city’s signature institutions is showing the world that free markets remain the most durable tool for solving strategic problems. Policymakers in Washington would be wise to let that lesson inform the next round of critical-minerals legislation.
Sources: CME Group, Oct. 19, 2026 — Defense Profile, Oct. 9, 2026 — Investing.com, Oct. 19, 2026
