On July 1, 2026, Japan's Mitsubishi Materials officially implemented a new round of price adjustments for its cemented carbide products: prices for cemented carbide inserts rose by 50% to 85%, while prices for tungsten carbide drills and end mills increased by 32% and 41%, respectively. Prior to this, Sumitomo Electric had announced price hikes of up to 60% for cutting tools and the complete cessation of external sales of high-end cemented carbide rods starting in July.
Japanese cutting tools are shifting from being the "preferred choice for high-end needs" to products that are "neither affordable nor obtainable." This wave of price increases is not merely a commercial move; it reflects a profound restructuring of the global tungsten supply chain-a transformation centered on China. Since January 2026, China has officially included tungsten-related products in its "Dual-Use Items Export Control List," significantly tightening licensing requirements for exporting products such as tungsten carbide and high-purity tungsten powder to specific countries. Between February and April 2026, China's exports of tungsten carbide and tungsten powder to Japan dropped to zero. Japan relies almost entirely on imports for its industrial tungsten needs, with China historically serving as its primary supplier. Osamu Inoue, President of Sumitomo Electric, candidly admitted at a press conference in May: "Procurement from China has completely stopped."
Japan's annual demand for tungsten is approximately 9,370 tons, yet the country possesses virtually no tungsten deposits that are economically viable to mine. Mitsubishi Materials relies on China for about 80% of its tungsten raw materials. With supply chain disruptions, Japanese companies face not only rising costs but an existential crisis regarding the continuity of product supply. Mitsubishi raised the prices of its tungsten-based cemented carbide materials to more than three times their previous levels-a move that was not simply a pass-through of costs, but a strategy of "forced risk pricing."
Faced with the risk of raw material shortages, the company adopted extreme pricing measures to hedge against future supply disruptions and prioritize the needs of high-value customers. Mitsubishi has significantly raised its prices (by 50%–85%), a move that stands in stark contrast to the price adjustments made by leading domestic Chinese cutting tool manufacturers-who implemented increases of 10%–20% for 2025, reaching a cumulative rise of approximately 40% by the first half of 2026. When foreign brands shatter existing price barriers through such steep hikes, the cost for customers to switch suppliers drops dramatically. The Chinese market for CNC cutting tools is valued at approximately RMB 50 billion, with domestic products holding a market share of around 50%; this implies an import substitution potential of roughly RMB 25 billion-a potential that is currently being rapidly unlocked. In high-end sectors such as aerospace and precision mold manufacturing, imported cutting tools previously commanded a market share exceeding 70%.
