The ongoing conflict in the Middle East is sending shockwaves through a niche but critical segment of the global commodities market. Prices for tungsten, sulfur, and helium have surged sharply in recent weeks, a ripple effect from the Iran war that intersects with pre-existing constraints driven by China’s export controls and stockpiling efforts. While these materials don’t command the daily headlines like oil, their heightened scarcity poses a direct threat to the semiconductor supply chain—the very foundation of artificial intelligence hardware and modern defense systems.
These three elements play irreplaceable roles: tungsten’s extreme hardness forms the electrical connections within semiconductor chips; sulfuric acid, derived from sulfur, is essential for cleaning silicon wafers; and helium’s inert properties prevent unwanted reactions during the delicate chip fabrication process. The current squeeze, analysts warn, reveals a fragile dependency on concentrated supply chains.
Tungsten: The Hardest Hit
Tungsten prices have been the most dramatic. The industry benchmark, ammonium paratungstate (APT), soared to a record high of over $3,000 per metric ton unit (MTU) late last week, according to data from Fastmarket as quoted by miner Almonty. This marks a surge of well over 50% for the month and more than a tripling in price since late December.
Supply Constraints and New Production
The price explosion is fueled by a perfect storm of factors. China, which dominates processing, began restricting tungsten exports just over a year ago. The Iran war has now exacerbated the situation by disrupting shipping routes. However, supply may be slowly adjusting: Almonty officially reopened its large Sangdong tungsten mine in South Korea earlier this month and has a project in Montana, U.S., slated to begin production this year.
Lewis Black, CEO of Almonty, told CNBC that defense sector demand for tungsten has been “extremely strong” since early 2025. He noted that while the Iran war itself hasn’t changed demand patterns, a critical shift has occurred: “There’s no material to stockpile. That’s probably the biggest change.” The market is fundamentally bare.
Sulfur and Sulfuric Acid: A Chemical Choke Point
Sulfur, and its derivative sulfuric acid, are seeing significant price pressure, particularly in regions reliant on Middle Eastern imports. Goldman Sachs analysts, citing meetings with a local Chinese miner in Africa, reported that sulfuric acid prices there are at least 30% higher than before the war and continue to rise.
China’s Dependence on the Middle East
More moderate assessments from S&P Global Platts show China’s sulfur prices (including cost and freight) climbed about 13% from early March to $621 per tonne as of March 26. The vulnerability lies in dependency: S&P analysts Pan Yuya and Isaac Zhao noted that approximately 56% of China’s sulfur imports originated from the Middle East in 2025. They warned that a “2-3 month effective blockade would likely become a severe supply shock.”
HSBC analysts echoed this concern in a March 16 report, stating that even before the conflict, sulfur prices were rising sharply due to a tightening market. The current “super squeeze” in this “rather obscure commodity” highlights a critical supply chain weakness.
Helium: A Fragile, Specialized Market
Helium prices have roughly doubled since the Iran war began, according to Fitch Ratings. The market is inherently tight due to helium’s difficulty in storage and transport, which relies on specialized containers. The conflict delivered a crippling blow: Iranian missile attacks this month damaged a key industrial center in Qatar, which produces about one-third of the world’s helium supply.
Limited Transparency, Profound Impact
Because most helium is traded via private long-term contracts, industry-wide price transparency is limited. However, spot market indicators show the strain. Data from Wind Information reveals that prices for helium in China’s Henan province rebounded from a February 28 low of 545 yuan ($78.85) per bottle to 600 yuan ($86.81). Christopher Ecclestone, principal and mining strategist at Hallgarten & Company, pointed out that the damage to Qatar’s production implies “helium supply won’t be restored anytime soon.”
The Bigger Picture: A “Supermarket” with Missing Aisles
These shortages are the latest in a series of supply chain disruptions following Russia’s invasion of Ukraine and the COVID-19 pandemic. The response has been a push for diversification and national stockpiling, with China notably accelerating its efforts.
Rhodium Group noted in a March 24 report that “Access to supplies of certain physical materials where production and processing is concentrated in China will become more frequent topics of negotiations with Beijing.” A profound challenge is the lack of price transparency, which may mask the true depth of shortages. Ecclestone starkly illustrated this: “you don’t have anyone on the buy side saying, ‘oh my goodness, we don’t have enough product.’ Defense contractors should have warehouses of tungsten, but they don’t.”
His metaphor cuts to the core of the issue: “The world has got lazy. It thinks life is like a supermarket, the product is a pack of cornflakes or a few tons of sulfuric acid. The supermarket of commodities has had a few of the aisles chopped down.” The convergence of geopolitical conflict and strategic export controls is exposing the critical vulnerabilities in the aisles that power advanced technology and national security.
This article incorporates data and analysis from Fastmarket, S&P Global Platts, Wind Information, Goldman Sachs, HSBC, Fitch Ratings, and commentary from Almonty Industries, Hallgarten & Company, and Rhodium Group. All price figures are based on the cited sources’ reporting as of late March 2026.
