China dominance in critical metals prompts industry shifts

China's significant control over critical minerals is driving strategic changes in global industry and financial markets. The CME Group has announced plans to launch a tungsten futures market by early 2027 to increase price visibility for the metal. Tungsten is essential for aerospace, automotive, and mining industries due to its extreme hardness and high melting point. China currently produces approximately 79% of the world's tungsten and controls 86% of its refining, leading to supply complexities following export restrictions implemented in April 2025.

In the semiconductor sector, TSMC is exploring factory automation equipment that utilizes motors without rare earth elements. This move aims to reduce dependency on the 17 rare earth metals where China maintains a near-monopoly, controlling roughly 60% of global extraction, 91% of refining, and 94% of magnet production. These metals are vital for smartphones, electric vehicles, and defense technologies. The push for alternatives follows Chinese export licensing requirements and restrictions on heavy rare earths and magnets.