America Is About to Lock In Its Tungsten Scrap. Domestic Recycling May Not Be Ready.
By Zach Kaikis and Harish Raheja
The new restriction on tungsten-scrap exports is meant to strengthen U.S. supply security. But keeping material in the country only helps if there is enough capacity to recycle it and put it back to work.
On August 27, a new federal rule takes effect on one of the less visible but strategically important material streams in American industry: tungsten scrap.
Under a Defense Production Act allocation order issued by the Commerce Department’s Bureau of Industry and Security, anyone in the U.S. selling covered tungsten waste and scrap must allocate 100% of monthly sales to U.S. buyers. The material generally has to remain physically inside the country unless BIS approves an adjustment or exception. The order runs through August 27, 2027.
The reasoning behind the rule is easy to understand.
Tungsten is a critical mineral. China dominates global supply and added export controls on tungsten products in February 2025. Prices have since risen sharply, while the United States has not mined tungsten commercially since 2015.
Against that backdrop, keeping recoverable tungsten at home sounds like an obvious win for the domestic supply chain.
There is just one problem: keeping scrap in the United States does not automatically create the capacity to recycle it.
Publicly available data do not show how much additional, route-specific recycling capacity is actually available to absorb material that historically left the country. Total tungsten-processing capacity and available capacity for outside scrap are two very different things.
The scrap was never really leaving the supply chain
So where was that material going?
A 2025 trade-flow analysis indicates that roughly approx. 75% of the broader scrap-like export flow went to Europe, including Germany, the U.K., Finland, Austria, Czechia and nearby markets.
That matters because Europe has some of the world’s most developed tungsten-recycling and toolmaking networks.
Clean cemented carbide can be reclaimed through processes such as zinc recycling. More complicated material can require chemical processing that converts tungsten back into oxide, tungsten compounds, metal powder or tungsten-carbide powder.
From there, the material moves back into manufacturing as coated inserts, drills, dies, wear parts and other precision tooling.
And the United States buys heavily from that downstream system. In 2025 alone, U.S. imports included roughly $1.00 billion of unmounted carbide and cermet tips and another $120 million of cermet rock-drilling tools.
Trade data cannot trace a particular insert on a shop floor back to the exact scrap shipment that left the United States years earlier. That is not the point.
What the data do show is a broader circular relationship: the United States exports recyclable tungsten-bearing material into foreign processing networks and imports substantial quantities of tungsten powders, intermediates and finished tooling from those same manufacturing systems.
Cutting that loop at the scrap stage deserves more thought than simply asking whether the tungsten stays inside the country.
Because one thing does not change on August 27: American manufacturers still depend on highly engineered carbide tooling.
A carbide insert is not an interchangeable lump of tungsten. It is a qualified, precision-ground and coated product with a specific grade, geometry and performance profile. Machining, automotive, aerospace, oil and gas, mining, construction and defense all rely on that tooling.
Keeping the raw material here only helps if the domestic system can economically turn it back into something American industry can use.
Yes, we have processing capacity. How much is actually available is another question.
The United States is not without tungsten processing.
USGS reports seven U.S. processors capable of converting some combination of tungsten concentrates, ammonium paratungstate, tungsten oxide and/or scrap into metal powder, carbide powder or tungsten chemicals.
The important words are “and/or scrap.”
Being able to handle one or more tungsten feedstocks is not the same as being a dedicated scrap recycler. And a plant’s total production capacity does not tell us how much additional outside scrap it can take.
Published capacity figures in this industry often combine scrap with concentrates, ore-derived intermediates and other feedstocks. Some recycling operations disclose that they have the capability without publishing actual throughput. Newer dedicated projects are important, but they remain relatively small compared with historical scrap flows.
That distinction matters.
A plant capable of producing thousands of tons of tungsten products each year is not necessarily capable of taking thousands of additional tons of outside scrap. Its existing capacity may already be committed to other feedstocks or customer contracts.
The argument is not that America has no recycling capacity. It clearly does.
The unanswered question is how much uncommitted, route-specific domestic recycling capacity is available for the additional material the rule will retain.
And route matters more than a national capacity number might suggest.
Clean sorted carbide, mixed and brazed material, grinding sludge and low-grade residues do not all use the same recycling process. A national figure can therefore look adequate while a particular scrap stream still has no practical domestic outlet.
And the material keeps coming
It is also easy to underestimate how much tungsten moves through the United States in the first place.
Using published U.S. Geological Survey data, primary and intermediate imports accounted for approximately 8,260 metric tons of contained tungsten in 2025, while tungsten waste and scrap reported separately added another 3,810 metric tons.
Adding those two published categories gives a calculated total of roughly 12,070 metric tons of contained tungsten imports in 2025.
That 12,070-ton figure is our calculation from the two published USGS series. USGS does not report it as a standalone total, and it still leaves out tungsten contained in many imported finished tools and other products.
A meaningful share of that material eventually becomes scrap, residue or an end-of-life product somewhere in the U.S. economy.
So this is not simply a question of what happens to last year’s exports.
It is a question of whether the United States is building a recycling system capable of handling the continuing tungsten flow of a major industrial economy, year after year.
What happens if the buyers aren’t there?
This is where a policy meant to improve supply security can start working against itself.
If access to established foreign buyers is sharply reduced before enough domestic demand exists, U.S. scrap prices could fall.
And if prices fall far enough, collectors and dealers lose some of the incentive to do the less visible work that makes recycling possible: collecting, sorting, testing and preparing difficult material.
Clean carbide will probably still find a home. Lower-grade mixed material and complicated residues are the bigger concern.
Inventory builds. Working capital gets tied up. Collection economics weaken. Eventually, material that used to be worth recovering may no longer be economical to process.
That would be the opposite of what the policy is meant to achieve.
How large is the exposure?
Based on the published USGS export series, shipments under the covered tungsten-scrap code ranged from roughly 990 to 1,910 metric tons of contained tungsten per year from 2021 through 2025. By our calculation, that works out to an average of roughly 1,350 to 1,400 metric tons per year.
Not all of that retained material would become surplus. Domestic processors may be able to substitute some scrap for ore, concentrates or intermediate feed they would otherwise purchase.
Our scenario analysis — our interpretation of the available data, not an official forecast — suggests that roughly 400 to 1,500 metric tons of contained tungsten per year could still require additional processing capacity, inventory or another outlet under historical conditions.
The actual number cannot be known without plant-level information on feed mix, utilization, contracts and available spare capacity, much of which is not publicly disclosed.
The goal is right. The sequencing needs work.
None of this is an argument against domestic tungsten recycling.
America should recycle more tungsten. It should reduce its dependence on vulnerable foreign sources. And it should invest in domestic processing.
The question is sequence.
Before requiring 100% of covered monthly sales to be allocated domestically, policymakers should know how much material each recycling route can actually absorb.
Commerce could require confidential reporting on external scrap intake, feed mix, utilization and spare capacity, then publish those figures in aggregate. Retention requirements could rise as verified domestic absorption comes online rather than beginning at the ceiling.
There is also a useful mechanism already recognized by the rule.
BIS identifies foreign processing or refining followed by return of the processed material to the United States as a possible basis for an adjustment or exception. Making that pathway more standardized and predictable for documented return processing could preserve strategic control of the material without unnecessarily disrupting allied recycling relationships that took years to build.
For difficult scrap streams, federal support should focus directly on the processing routes that are actually missing.
And if the government requires material to stay in the country before enough commercial demand exists, strategic-stockpile purchases or other offtake mechanisms deserve serious consideration.
Scrap generators should not have to finance the buildout of domestic recycling capacity through sharply lower prices.
There’s still time to get the sequence right
The rule includes an adjustment and exception process, and requests can already be submitted.
Public comments on the temporary final rule are due November 4, 2026, and the allocation order expires August 27, 2027 unless BIS changes or extends it.
That gives scrap generators, recyclers, toolmakers and manufacturers a real opportunity to put operating data on the record.
How much material is actually being generated? Which grades already have domestic buyers? Which recycling routes have room, and which are full? What happens to scrap prices after the rule takes effect? How much foreign toll processing is still necessary? And how quickly can real domestic capacity come online?
Those are the questions that will determine whether the policy strengthens the tungsten supply chain or simply moves the bottleneck.
Tungsten earned its place on the critical-minerals list because modern manufacturing cannot easily function without it.
That is exactly why scrap policy needs to consider the entire supply chain, not just whether material crosses the border.
Keeping tungsten inside the United States is not the same thing as securing it.
Security means being able to collect it, process it, convert it and put it back to work.
The material can be locked in overnight.
The supply chain cannot.
Figures in this article are drawn from U.S. Geological Survey trade surveys, the Federal Register, state environmental permits, U.S. Customs rulings and public industry and government disclosures, current as of August 2026.
