Almonty Industries: A Meteoric Rise Fueled by Tungsten’s Strategic Shift

Almonty CA0203981034

The equity of Canadian tungsten producer Almonty Industries is experiencing a gravity-defying rally. While a landmark supply agreement has ignited market enthusiasm, a staggering 478% annual surge inevitably prompts scrutiny. Is this a fundamental revaluation in a critical commodity sector, or are the shares at risk of overheating after such a vertical climb?

The powerful rally is underpinned by a profound structural shift in the global tungsten market, which investors are rapidly pricing in. Tungsten prices have soared by more than 160% in 2025. This surge is primarily driven by export restrictions from China, which commands over 80% of worldwide supply.

The geopolitical landscape continues to tighten. The United States will prohibit Chinese tungsten imports for military procurement starting in 2027. Within this environment, Almonty is strategically positioning itself as a pivotal Western producer, targeting a 40% share of the supply market outside of China.

The Catalyst: Securing Predictable Revenue

The immediate catalyst for the recent buying frenzy was a long-term offtake agreement. The company's Portuguese subsidiary signed the deal with Austria's Wolfram Bergbau und Hütten AG. This contract guarantees the purchase of fixed tungsten quantities from Almonty's Panasqueira mine.

For the company, the arrangement translates into predictable revenue streams and significantly improved earnings visibility. This comes at a crucial time as it ramps up production on a global scale.

The market's reaction has been forceful. In just the last four trading sessions, the stock advanced over 30%. It reached a new 52-week high of US$11.24 on January 23. Trading volume was exceptionally high, with 32 million shares changing hands. The year-to-date gain now stands at a spectacular 478%.

Valuation: A Heated Debate

Such a rapid ascent has naturally drawn attention from both bulls and skeptics. With a price-to-book ratio of 24.7, the stock is now valued at a premium compared to its peer group average of 17.3. Furthermore, the company remains in a capital-intensive ramp-up phase, reporting a recent net loss of CAD 65.04 million.

Optimists counter by pointing to valuation models, including discounted cash flow (DCF) analyses, which calculate a fair value of CAD 22.25—well above the current trading level on its home exchange. Analysts such as those at DA Davidson have maintained their "buy" recommendation.

The key to sustaining the share price momentum will be flawless operational execution. Following the commencement of commercial production at the Sangdong mine in South Korea in December 2025, management's focus has shifted to the "Gentung Browns Lake" project in Montana. Production readiness there is targeted for the second half of 2026. If Almonty can adhere to this timeline, its strategic importance as a Western supplier may well justify the current premium valuation.