Two years ago, the Netherlands kicked off a global commodity cold war…

The Netherlands is home to ASML (ASML). As the sole producer of machines for chipmaking, ASML is a mandatory link in the chip supply chain.

That’s why, in 2023, Uncle Sam leaned on the Netherlands to block chip exports to China. The Netherlands complied – limiting Chinese access to ASML products.

And the global commodity market shifted overnight…

China controls many of the materials needed for chipmaking. So Beijing responded by curbing Western access to two key minerals, gallium and germanium. (China produces 80% and 60% of each metal, respectively.)

Gallium and germanium were China’s first moves in the commodity cold war. But they probably won’t be the last.

And that threat is creating a wildly bullish setup in a commodity market that investors rarely think about.

Let me explain…

This Looming Supply Squeeze Could Fuel Investor Returns
Nothing beats diamonds for hardness… But tungsten isn’t far behind.

Tungsten was discovered by Spanish chemists back in 1783. Some forms of the metal score a 9 on the Mohs scale used to classify mineral hardness (diamonds are a 10). Plus, it’s heat-resistant.

These properties make tungsten essential to a wide swath of modern industries, including…

  • Military – tungsten is used for armor, bullets, and other tools of war.
  • Semiconductors – a layer of tungsten is applied to boost conductivity and protect against heat.
  • Robotics – tungsten is highly desired for manufacturing robotic arms and heavy equipment.
  • Electric vehicles – the average EV contains about 1.5 kg of tungsten components.
  • Mining and Energy – tungsten is the industry standard for drill bits to pull resources out of the ground.

So, the economy needs tungsten. In fact, the United States Geological Survey even declared it critical to national security in 2022.

But there’s a problem…

The U.S. has spent decades letting tungsten production go to other countries. Today, China produces 84% of the world’s supply of tungsten. And Russia produces 3%.

That puts 87% of global tungsten production in the hands of U.S. rivals – including one with a history of “shutting off the tap” on its resources, like gallium and germanium.

The next step in the commodity cold war could sever the U.S. from a critical mineral.

That’s a setup for a nasty supply squeeze… And it could spark a massive long-term rally for the companies that mine tungsten.

For example, one company that has mined, processed, and shipped tungsten concentrates for more than a decade is already soaring.

Take a look at Almonty Industries’ (ALM) performance so far this year…

The company is up 455% year to date. But the bull run is likely just getting started…

In short, tungsten’s moment is here. A supply squeeze is brewing in this commodity – and that could send stocks like Almonty rocketing higher still.

Don’t get caught flat-footed while this setup unwinds. Add tungsten exposure to your portfolio today.

Good investing,

Sean Michael Cummings

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Source: Daily Wealth