The United States government has implemented new export controls aimed at keeping tungsten scrap and lithium-ion battery black mass within its borders, a move expected to disrupt the supply chains for Chinese refiners and reshape the global market for these strategic materials. The restrictions, announced last Thursday under the administration of President Donald Trump, require suppliers to allocate all of their monthly output of these materials exclusively to U.S. buyers for one year, effectively banning their export.

Tungsten, valued for its density, strength, and exceptionally high melting point, is critical to producing semiconductors, aerospace equipment, artificial intelligence chips, and military hardware. Black mass, the shredded residue from recycled lithium-ion batteries, contains recoverable metals such as lithium, nickel, and cobalt, essential for battery manufacturing and other advanced technologies.

This one-year directive represents Washington’s latest effort to secure key resource supplies amid growing global competition, following China’s own export controls on various tungsten products introduced in February 2019. Beijing responded last year by easing restrictions on imports of compliant battery black mass, cutting import tariffs, and expanding access to overseas recycling feedstock. Despite these adjustments, Chinese customs data indicate that tungsten product exports to the U.S. had ceased during the first seven months of this year.

Analysts caution, however, that the U.S. lacks sufficient processing capacity for tungsten scrap and black mass, potentially limiting the effectiveness of the restrictions in the short term. According to Liang Yan, an economics professor at Willamette University, constructing new refineries capable of handling these materials could take between two and five years. Last year, U.S. black mass exports totaled approximately 100,667 tonnes, a nearly 49 percent year-on-year increase, while China imported around 111,657 tonnes of industrial waste, including black mass, from the U.S. in the first seven months of 2020. This volume represented about 10 percent of China’s total supply.

The constraints are expected to reduce the availability of lower-cost feedstock for China’s battery recycling industry, prompting Beijing to accelerate domestic recycling efforts and potentially employ its own export controls on rare earth elements and magnets. Reports suggest China’s informal market for retired batteries and black mass remains active, with unlicensed workshops competing with licensed recyclers for supplies.

Experts project that U.S. export controls may broaden beyond tungsten and black mass to include discarded rare earth magnets, other critical mineral wastes, and additional materials. Xu Tianchen, senior economist at the Economist Intelligence Unit, identified tungsten as "the first tranche," with future controls possibly covering rare earths, antimony, gallium, germanium, and more. Liang also highlighted the potential extension of restrictions to permanent magnets containing neodymium and dysprosium, aerospace-grade titanium, and superalloy scrap.

Despite reduced feedstock access, Chinese companies have been expanding overseas investments to secure raw materials and enhance their global recycling networks, seeking to mitigate the impact of U.S. policies and maintain supply chains critical to their high-tech industries.