Rheinmetall's Wolfram Squeeze Adds to a Day When Good News Didn't Move the Needle

Rheinmetall shares slide 2.6% despite Twinvis radar success; US tungsten scrap export ban adds supply chain risk to ammunition production.

The defence contractor's share price has been a study in frustration for investors lately, and Wednesday offered no relief. Even as Rheinmetall showcased a meaningful step forward in networked air defence alongside Hensoldt, the stock slid 2.6 percent to close at €1,180.00 — a drop that now leaves the equity 24 percent in the red since the start of the year.

That disconnect between operational progress and market reception is becoming a pattern. The Twinvis passive radar trial, conducted during the German Air Force's "Timber Express 2026" exercise, saw sensor data fed directly into Rheinmetall's command-and-control system. Passive sensors, which emit no signals of their own, are significantly harder for adversaries to detect — a capability that underscores the group's integration strengths in ground-based air defence. Yet the news barely registered with traders.

A Raw-Materials Clock Starts Ticking

The more structural concern, however, is brewing in the supply chain. Washington is set to block exports of tungsten scrap for one year starting 27 August, and that matters deeply for Rheinmetall's ammunition production. Tungsten is a critical input for propellant charge modules, and the company is currently building a new powder plant in Aschau designed to turn out more than a million such modules annually. That facility's ramp-up depends on reliable material flows, and the US export ban introduces a fresh layer of procurement complexity.

The immediate production risk is limited, but the administrative and logistical burden is real. Any hiccup in material supply could slow the capacity build-out at Aschau precisely when European defence demand is straining against delivery timelines.

Diversification Moves Are Already Underway

The industry is not waiting around. Canadian tungsten producer Almonty restarted output at its Sangdong site in South Korea in early July, and Austrian hard-metal specialist Plansee has already extended its off-take agreement with Almonty by 21 years — a clear signal that buyers are repositioning away from US-sourced tungsten scrap for the long haul. Canada's Sisson project in New Brunswick, in which Adelayde Exploration holds a roughly 9,780-acre stake, adds another potential supply avenue.

How quickly these alternative channels can be scaled will likely determine whether the Aschau plant reaches its full production potential on schedule. For investors, the evolution of these supply chains is becoming a key variable to watch in the coming months, particularly as defence firms operate under heightened geopolitical scrutiny.

The Technical Picture Remains Soggy

The chart offers little comfort. Rheinmetall shares are trading 41 percent below their 52-week high of €2,007.00, reached on 3 October 2025. The stock sits roughly 18 percent beneath its 200-day moving average, and last week's 0.5 percent gain did little to suggest a directional shift — the equity is drifting sideways while new headwinds like the tungsten export ban accumulate.

The Fundamentals Tell a Different Story

Beneath the market's skittishness, the operating numbers remain robust. First-half revenue climbed 39 percent to €5.2 billion, while operating profit jumped 74 percent to €786 million. Earnings per share from continuing operations rose to €8.43, up from €4.69 a year earlier.

The order book is the real anchor. As of 30 June, Rheinmetall's total backlog stood at roughly €80.5 billion, a 44 percent increase year on year. The Vehicle Systems segment alone contributed €28.8 billion, up 41 percent. That pipeline provides multi-year planning certainty, even if the market is currently fixated on the near-term tape.

JPMorgan, for its part, maintained a "Neutral" rating with a €1,350 price target following the latest quarterly figures.

For now, Rheinmetall finds itself squeezed between two forces: a share price grinding through a difficult technical phase and a supply-chain question that could test the group's ambitious production plans. The tungsten clock starts at the end of August, and the market will be watching closely to see whether alternative sources can fill the gap.