A US metals distributor has hedged its tungsten price risk using contracts on Kalshi, which the companies involved call the first commercial price hedge for the metal. Tungsten has no established futures market, leaving buyers exposed to sharp price swings.
At a glance
- The contracts track the Rotterdam price of APT, the main traded tungsten product, and settle on December 17, 2026.
- The companies say APT prices have risen more than 500% over two years.
- CME Group separately plans to launch tungsten futures in the first quarter of 2027.
Background
Tungsten is a very hard metal that withstands extreme heat, used in defence, aerospace and industrial applications. China is the dominant producer and has restricted exports. Unlike oil, gold or copper, tungsten has never had a futures market where buyers can lock in prices. Ammonium paratungstate (APT) is the intermediate product most tungsten is traded as. Kalshi is a US platform where traders buy and sell contracts on the outcome of future events.
What happened
Commodity risk firm Pillar hedged tungsten price exposure for an Ohio-based metals distributor on October 22, using Kalshi event contracts, Mining.com.au reported. The companies described it as the first commercial pricing hedge for the metal, and Bloomberg also reported the trade.
The contracts are tied to the Shanghai Metals Market benchmark price for APT delivered to Rotterdam, and settle on December 17, 2026. Trading firm Susquehanna Predictions helped structure and price the deal and supplied liquidity. Kalshi itself does not take either side of the trades.
Why buyers want a hedge
Tungsten prices have swung wildly. The companies say APT prices have risen more than 500% over two years, including a jump of as much as 94% in six weeks this spring. Prices have also fallen hard since then: in China, APT was down 67% from its March peak by mid-October, Shanghai Metals Market data showed.
Without a futures market, manufacturers have had to absorb such swings or pass them on to customers. US Defense Department rules due in 2027 are expected to narrow the pool of approved tungsten suppliers, adding to supply worries.
What comes next
More hedging tools are on the way. CME Group plans to launch tungsten futures on COMEX in the first quarter of 2027, subject to regulatory review. Pillar chief executive Harsha Ramesh said the aim is to give "American businesses the financial tools to compete, secure their supply chains, and thrive in an increasingly volatile world."
Our read
Outlook: neutral. A hedging tool helps buyers manage price swings but does not change tungsten supply or demand.
What to watch
- How much trading Kalshi's tungsten contracts attract before they settle on December 17.
- The launch of CME's tungsten futures, planned for the first quarter of 2027.
- US Defense Department supplier rules for tungsten that take effect in 2027.
For information only, not investment advice.
Detailed analysis
Timeline
- 2026-10-19: CME Group announces plans for tungsten futures in early 2027.
- 2026-10-22: Pillar completes the first tungsten price hedge on Kalshi.
- 2026-12-17: The Kalshi tungsten contract is scheduled to settle.
Supply Drivers
With China dominant, buyers outside China face volatile prices and few ways to manage them.
Government Policies
China's export restrictions and new US defence sourcing rules due in 2027 are tightening tungsten supply.
What could lift prices
- US defence rules from 2027 are expected to narrow the pool of eligible tungsten suppliers.
- Chinese export restrictions continue to limit supply to the West.
What could weigh on prices
- Chinese APT prices fell about 67% from their March peak by mid-October.
- Hedging tools can calm the panic buying that drove this year's spikes.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | Medium | American buyers gain new ways to hedge a defence-critical metal. |
| China | Low | Its export curbs are the main reason Western buyers want price protection. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Defence | Positive | Suppliers of tungsten parts can now protect themselves against price spikes. |
| Commodity Trading | Positive | Tungsten becomes a tradable market for the first time. |
Who gains, who loses
- Tungsten buyers such as metal distributors: They can now lock in prices instead of absorbing sudden swings.
- Sellers relying on opaque pricing: Public order books make tungsten prices more visible to buyers.
Other ways this could play out
- If the Kalshi contracts draw steady trading, more buyers could hedge before CME's futures launch.
- If trading stays thin, most companies may wait for CME's futures in 2027.
Price risks
- Tungsten prices depend mainly on Chinese export policy.
- Thin markets can make hedge prices move sharply.
United States
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