Tungsten is down 69% since March, and DoW stops accepting the Chinese kind on January 1

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Good morning. Tungsten has gotten 69% cheaper since March, and if you sell to the Pentagon that's less good news than it sounds.

Inside: the January 1 sourcing cliff, Northrop's rocket motor design award, 14 days on China's rare earth pause, Lockheed's record backlog, and the dates that matter through November 9.

On October 15, a ton of Chinese ammonium paratungstate sold for 470,000 yuan, according to Shanghai Metals Market. On March 12 the same ton set a record at 1.515 million. Commercial tungsten buyers have had a pleasant autumn.

Defense work runs on a different calendar. DFARS 252.225-7052 already keeps tungsten that was melted or produced in China, Russia, Iran or North Korea out of DoW supply chains. On January 1, 2027, the rule reaches all the way back to the mine, so material mined, refined or separated in those countries is barred as well. The same change applies to rare earth magnets and tantalum. The exemption for commercial off-the-shelf parts gets tighter too. Today a COTS item is exempt unless it is at least half tungsten by weight. After New Year's, that test counts all the covered materials together.

A lot of suppliers were counting on waivers. Executive Order 14415 closes most of that path on January 1, when waivers under 10 USC 4872(c)(1) stop unless the contractor has an accepted mitigation plan. "Even for limited volumes, I expect waivers will be necessary for certain programs," Richard Arlot of IMAG Consulting told S&P Global Platts on October 16. The same order gave the Pentagon 90 days to write a strategy for speeding up qualification of new sources. That clock ran out around October 18, and nothing has been published.

China mined 67,000 of the world's 85,000 tons of tungsten last year, according to USGS. The United States hasn't mined any commercially since 2015. Washington is now buying its way into the gap. On September 14 the Pentagon committed $450 million in preferred equity to The Elmet Group. DLA also gave Elmet's operating unit a tungsten contract with a $2 billion ceiling, $150 million of it guaranteed.

If tungsten heavy alloy or carbide tooling appears anywhere in your bill of materials, ask your supplier this week where the powder was mined and refined, and get the answer in writing. If the answer is China and the part delivers in 2027, start the mitigation plan conversation with your contracting officer now, before every other supplier in the program has the same idea.

Sources: SMM · DFARS 252.225-7052 · EO 14415 · S&P Global Platts · USGS · Elmet 8-K

Strategic missiles · Northrop Grumman · $43.9M · Navy

The Navy's Strategic Systems Programs gave Northrop a $43.9 million firm-fixed-price contract on October 23 to design new "dry and grind" facilities for Trident II D5 rocket motors at the Naval Industrial Reserve Ordnance Plant in Magna, Utah. The full amount was obligated at award from fiscal 2026 weapons procurement funds, and the work runs through August 2028. It's a design job, so no new motors come out of it for a while. Motors have been the slow part of missile production for years. "There's still not enough capacity," RTX's Tom Laliberty said in 2024. If you supply propellant ingredients or processing equipment, watch who wins the construction contract that follows. Award · Quote · Details

Aviation · Longbow LLC · $419.6M · Army

Longbow, the joint venture of Lockheed Martin and Northrop Grumman, won a $419.6 million indefinite-delivery contract on October 22 for Apache fire control radars and post-production support, running to January 2032. The Army will obligate money as it places individual orders, so treat the headline number as a ceiling. Suppliers to that radar now have a five-year vehicle to sell through. Award · Details

Capital · Xona Space Systems · $250M Series D · Future Ventures

Xona raised $250 million on October 22 at a $2.45 billion valuation, led by Future Ventures. It's building a navigation constellation in low Earth orbit meant to back up GPS. That matters to anyone whose system has to keep working when GPS is jammed. Source

Rare earths · No extension notice for No. 70 · Nov 10

Beijing has 14 days left and still hasn't published the notice that would keep its pause on the October 2025 rare earth controls in place. Last year's notice came out three days before it took effect, so the silence doesn't tell us much yet. Primes and magnet buyers using dysprosium or terbium magnets carry the most risk. Terbium oxide eased to 6.33 to 6.37 million yuan a ton this week, from 6.55 to 6.60 million in late September. Source

Antimony · Down from 105,000 to 90,000 yuan since October 12 · Nov 27

Chinese antimony ingot sat flat at 90,000 yuan a ton all week after a quick slide. China's pause on its antimony export ban to the US ends November 27. The Army says antimony sulfide goes into nearly 30% of military ammunition items, mostly in primers, so munitions makers should know their source before Thanksgiving. Price · Army

Drone components · New Chinese export controls · Nov 18

Announcement No. 49, issued October 19 by MOFCOM, Chinese customs and the Central Military Commission, puts licensing on brushless motors above set thresholds, larger speed controllers, certain propellers, autopilots and long-range drones. It takes effect November 18. US builders who buy those parts from Chinese suppliers have about three weeks to check their sourcing. See our disclosures. Source

NEW THIS WEEK IN PRICE AND POLICY

The Elmet Group · $450M DoW preferred equity · Economic Defense Unit · Sep 14

Albany Engineered Composites · $21.2M IBAS award · Army, Cornerstone OTA · Sep 29

Pro members get the full Price and Policy table: 53 government deals in critical materials since January 2025, worth $19.95 billion in stated commitments.

The full map, with all 16 materials and the deadlines through 2027, is free at tots.nerdrums.com/chokepoint-map.

Sources: Boeing · L3Harris · HII · GD · BWXT · Leidos · Affiliates rule

Somebody in every supply chain finds the deadline the week it arrives. January 1 is written into federal regulation and an executive order, so this one shouldn't sneak up on anyone.

If you're sorting out tungsten or magnet sourcing right now, hit reply and tell me what's getting in the way. I read every reply, and what I hear shapes the next issue, with names left out.

Semper Fi,
Justin