Businesses can now hedge against tungsten price volatility through the Kalshi platform, following what the companies involved described as the first commercial pricing hedge for the critical mineral.
On Thursday, commodity risk management firm Pillar hedged tungsten exposure on behalf of an Ohio-based metals distributor. The firm used Kalshi event contracts tied to the Shanghai Metals Market CIF (cost, insurance, and freight) benchmark for ammonium paratungstate (APT) in Rotterdam.
Susquehanna Predictions helped structure and price the transaction, while providing the institutional-scale liquidity needed to execute it.
The deal comes amid one of the most dramatic price rallies in the tungsten market, driven by export restrictions from China — the world’s dominant producer — and growing global supply constraints.
APT prices have risen more than 500% over the past two years, including a surge of as much as 94% over six weeks this spring, according to company statements.
Tungsten is considered a strategically important metal because of its hardness and ability to withstand extreme temperatures. These properties make it difficult to replace in the defence, aerospace, and industrial applications.
Supply concerns are also growing ahead of new US Department of Defense procurement restrictions scheduled to take effect in 2027.
The rules are expected to narrow the pool of eligible suppliers for certain tungsten materials used in defence applications, potentially increasing competition for available supply.
New market for tungsten hedging
Unlike widely traded commodities such as oil, gold, and copper, tungsten has historically lacked an established futures market.
This has left manufacturers and suppliers with limited options to protect themselves against sharp price movements, forcing them to absorb higher costs or pass them on to customers.
To address this gap, Pillar, Kalshi, and Susquehanna Predictions teamed up to develop a market based on the SMM CIF Rotterdam APT benchmark.
Pillar converted the client’s physical tungsten exposure into a hedging strategy, while Kalshi listed an event contract scheduled to settle on 17 December 2026, with Susquehanna helping to structure the deal.
According to the companies, this contract trades through an open, public order book, with prices determined by market participants. Kalshi does not take either side of the trades.
Founded in 2023 by former Barclays and Coinbase employees, Pillar has processed more than US$1 billion ($1.42 billion) in commodity risk for refiners, miners, scrap dealers, and manufacturers.
The company, backed by Andreessen Horowitz, uses its platform to convert clients’ physical transactions into hedges and manage them through execution and accounting.
Pillar CEO Harsha Ramesh says the new market would help US businesses manage exposure to critical minerals.
“At Pillar, we’re putting that strength to work to level the playing field in the global race for critical natural resources — giving American businesses the financial tools to compete, secure their supply chains, and thrive in an increasingly volatile world,” Ramesh says.
Tungsten trading market expands
The Kalshi transaction comes as other financial exchanges move to introduce new tools for managing tungsten price risks.
Earlier this week, CME Group (NASDAQ:CME) announced plans to launch tungsten futures contracts in the first quarter of 2027, subject to regulatory review.
The planned launch would provide another avenue for producers, manufacturers, and traders to hedge price exposure in a market that has traditionally lacked exchange-traded financial instruments.
Together, the developments highlight growing demand for price risk management as tungsten becomes increasingly important to global defence, industrial, and technology supply chains.
Write to Jackson Chen at Mining.com.au
Main Image: Kalshi
