As global tensions escalate and the US prepares for a rearmament supercycle, Almonty Industries is emerging as a key player in the supply of conflict-free tungsten. With a supply agreement already secured with Global Tungsten & Powders and its South Korean Sangdong operations ramping up, the company is well-positioned to capitalize on the growing demand for defense-grade materials. Analysts from major Wall Street firms are expected to attend Almonty's upcoming Investor Day, highlighting the company's strategic importance in the sector.
Tungsten, a critical metal for defense applications such as armor-piercing ammunition and fighter jets, has seen its price moderate from $3,140 to $2,700 per MTU. However, supply fundamentals remain strong, with Western APT/oxide plants operating at full capacity under long-term contracts. This has limited their ability to absorb additional concentrate, keeping supply tight and supporting prices despite the recent pullback.
Oppenheimer analyst Ian Zaffino noted that Almonty's Sangdong operation, which is now producing concentrate, is on track to begin shipments in late October. The company's $865M in cash should fund its projects, including Phase 2 of Sangdong and the oxide facility, as well as share buybacks. While Zaffino lowered his price target, he remains bullish on the stock, citing attractive valuations and the company's strong position in a tight market.
With the US defense procurement rules set to take effect in January 2027, Almonty's ability to supply conflict-free tungsten will become even more critical. The company's operations in Rwanda, Spain, and Montana offer additional supply options, ensuring its continued relevance in the global market. As Almonty prepares for its Investor Day, the focus will be on its progress in the tungsten market and the potential for further growth in the coming quarters.