Summary of Key Points
Starting from August 2026, the United States will ban the export of tungsten waste and battery “black powder” (a mixture of materials resulting from the dismantling of lithium-ion batteries), mandatorily prioritizing domestic companies for supply. This policy is based on the Defense Production Act and targets not “industrial waste” but “secondary resources” that can be used to extract key minerals. Tungsten is a critical material for military and high-end manufacturing, while black powder contains essential metals for new energy batteries such as lithium, nickel, and cobalt. This move directly impacts the supply chains of countries like Japan and South Korea, which rely on American waste materials. It presents opportunities for domestic U.S. companies but also carries the risk of insufficient production capacity. Essentially, this represents a new escalation in the global competition for key minerals, extending from the extraction of raw ores to the utilization of recycled resources.
1. Why is the U.S. “locking up” waste materials? They are not just trash; they are valuable resources
The main reason behind the U.S. ban is its own shortage of key minerals, making waste materials a vital resource:
- Tungsten: A small metal with significant strategic importance: Tungsten has a high melting point and strength, making it indispensable for aircraft engines, military equipment, and high-end tools. The U.S. has not commercially mined tungsten since 2015, and over 80% of its tungsten supply comes from China. With China tightening export controls, the U.S. relies on waste materials to fill this gap. These waste materials (such as used tungsten steel tools) represent a readily available source of tungsten for domestic use. Exporting them to foreign buyers would equate to handing over strategic resources.
- Battery black powder: A treasure trove of new energy metals: Black powder contains lithium, nickel, and cobalt, which are essential for batteries. The U.S. imports more than half of its lithium needs. With the expected surge in demand for electric vehicles and energy storage, recycled materials (such as those derived from black powder) could meet 20-30% of the global demand for these metals by 2050. By keeping black powder within the country, the U.S. aims to establish it as a secondary source for its battery industry.
2. Japan and South Korea’s supply chains are under threat: Short-term disruption is difficult to overcome
The U.S. ban poses a severe challenge for these countries:
- Japan: Japan relies 100% on imported tungsten for industrial use. After China tightened export controls, Japan significantly increased its imports of American tungsten waste in January-March 2026 (24 times the annual amount of 2025). With the U.S. ban, both domestic and recycled tungsten supplies are cut off. Although Mitsubishi and Sumitomo plan to expand their recycling capacity by 2028, small and medium-sized manufacturers will face soaring costs.
- South Korea: South Korea aims to become a battery recycling hub in Asia but lacks local raw materials and depends on American black powder. The ban reduces the supply of black powder, leading to higher purchase prices and further pressure on already marginal processing profits. However, there is a slight opportunity: if the U.S. allows recycling to be done overseas and then the products are imported back, South Korea, with its advanced refining technology, might take on some “processing on behalf of others,” but this won’t solve the immediate problem.
3. Domestic U.S. companies: Mixed reactions
The ban has a dual impact on local businesses:
- Beneficiaries: Domestic processors can now obtain more materials at lower prices, allowing them to expand production (e.g., tungsten refiners and battery refining companies). This aligns with long-standing demands in the recycling industry; previously, companies like Li-Cycle went bankrupt due to lack of raw materials. The ban provides a chance for recovery.
- Risks: Insufficient domestic processing capacity could lead to overstocking and falling prices for waste materials. Currently, only seven U.S. companies are capable of processing tungsten waste. If all exported waste remains in the country, there may be an oversupply, driving down recycling prices and harming small businesses that collect it. The success of the policy depends on whether domestic production can keep up.
4. Waste materials become a bargaining chip: Global resource competition enters a new era
This ban reflects a new trend in the global struggle for key minerals:
- Shift from raw ores to recycled resources: Developed countries used to dispose of waste materials in developing countries, but now realize that the metals contained in these materials are more valuable than the raw ores. The U.S. ban is part of this shift towards strategic control of recycled resources, which is as important as controlling raw ore extraction and refining technologies.
- Countries competing for secondary resources: Not only the U.S. but also the EU is promoting battery recycling regulations, and China is enhancing its use of recycled materials. In the future, those who master recycling technology and control these resources will have more influence in the fields of new energy and high-end manufacturing.
In summary
By banning the export of waste materials, the U.S. aims to secure its own mineral supply while restricting competitors. However, the effectiveness of this strategy depends on whether domestic production can handle the increased demand. The global competition for resources has moved beyond just extracting raw ores to also including recycled materials.