While silver captures headlines, a more targeted crisis is unfolding in the critical minerals sector. As of January 2026, China has shifted its export control strategy, moving from broad retaliatory measures to precision-targeted restrictions. The market is currently defined by a “tactical pause” with the U.S. contrasted against a sharp escalation with Japan.
The “Japan Ban” Escalation (January 2026)
In the first week of January 2026, China’s Ministry of Commerce (MOFCOM) effectively halted exports of key dual-use items to Japan, citing “military end-use” concerns. This follows political friction involving Taiwan. The primary casualty is Tungsten, a metal vital for hardening steel in defense and industrial applications. Japanese manufacturers of precision tools and defense components—who rely on China for ~56% of their tungsten Ammonium Paratungstate (APT)—are now cut off from their primary supply. Hence, Tungsten prices, which had already rallied 200% throughout 2025, have entered a new volatility phase, with panic buying spreading to South Korean and European markets fearing similar targeting.
The U.S. “Tactical Pause” (Nov 2025 – Nov 2026)
In a move to de-escalate tensions following the Xi-Trump meeting in late 2025, China temporarily suspended its total ban on exports of Gallium, Germanium, and Antimony to the United States. However, the caveat is that while the outright ban is paused until November 2026, the strict export licensing regime remains in full force. U.S. importers effectively operate on a shipment-by-shipment permission basis, keeping supply chains fragile. The reality is that this “pause” has not lowered prices to pre-2024 levels. Instead, it has solidified a “risk premium” where Western buyers are aggressively stockpiling non-Chinese inventory, keeping demand structurally higher than supply.
Sector-Specific Impacts
- Antimony (The Defense Choke-point): Despite the pause, antimony availability remains critical. Used in ammunition primers and flame retardants, global stockpiles outside China are at multi-year lows. The defense sector faces a 12-18 month lag to develop non-Chinese refining capacity.
- Gallium & Germanium (Semiconductors): China controls 98% of global gallium production. The 2025 restrictions forced a rewiring of supply chains; the current “pause” is viewed by the industry not as a solution, but as a window to accelerate “friend-shoring” projects in Vietnam and Eastern Europe, which are not yet at scale.
The New Normal: “Managed Permission”
The era of open trade for critical minerals has ended. The market has transitioned to a system of “managed permission,” where supply flows are dictated by political compliance rather than market demand. With the Japan restrictions now active, the risk has shifted from whether China will restrict exports, to who will be targeted next.