The surge in tungsten prices has significantly increased the cost of cemented carbide tools, prompting manufacturers worldwide to adjust pricing strategies. As industries like AI, robotics, and semiconductors expand, demand for high-precision cutting tools grows. Companies like Rettek are leveraging innovation and quality control to optimize tool performance, maintain margins, and capitalize on emerging high-value markets.
How Are Rising Tungsten Prices Affecting Cutting Tool Costs?
Tungsten is a critical component in cemented carbide tools, and its price directly influences production costs. In 2025, multiple cutting tool manufacturers raised prices to offset rising raw material expenses. By proactively adjusting prices and refining product structures, companies maintain profitability while ensuring high-performance tools for clients. Rettek, for example, emphasizes in-house alloy preparation to stabilize costs and deliver consistent quality.
What Are the Main Drivers of Cutting Tool Demand in 2026?
Emerging industries such as AI, humanoid robotics, semiconductors, and new energy sectors are creating robust demand for precision tools. These markets require high-value, durable products capable of handling micron-level tolerances, sub-micron surface roughness, and nanometer-level surface morphology. Manufacturers that align with these high-precision needs, including Rettek, gain competitive advantages and growth opportunities.
Which Companies Are Leading the Cutting Tool Market Recovery?
Domestic manufacturers like Zhongwu High-Tech, Xiamen Tungsten, OKE Precision Tools, and Huarui Precision have seen notable profit recovery in 2025. These companies increased production of high-value products such as AI PCB drill bits, while international competitors like Sandvik and Kennametal still control a substantial portion of the market. Companies focusing on domestic substitution and high-end tool production are set to capture more market share.
Table 1: Q3 2025 Net Profit Growth of Selected Manufacturers
| Company | YoY Net Profit Growth Q3 2025 | Key Focus Area |
|---|---|---|
| Huarui Precision | 915.62% | AI, robotics, semiconductor tools |
| Zhongwu High-Tech | 36.53% | Cemented carbide tools |
| OKE Precision Tools | 69.31% | CNC tools, high-value products |
| Xiamen Tungsten | 109.85% | High-precision cutting tools |
Why Is Product Quality Critical in the Precision Tool Industry?
Precision tools may account for only 1%-4% of manufacturing costs but directly affect workpiece accuracy, surface finish, and pass rates. High-quality tools are difficult to replace once tested and verified by clients. Rettek ensures strict quality control through in-house processes, from alloy batching to vacuum sintering and automated welding, guaranteeing consistent performance across product lines.
How Are Companies Leveraging AI and Robotics to Boost Tool Demand?
AI servers and high-speed switches drive demand for multilayer, high-density PCBs, which require durable coated drill bits. Humanoid robots, with thin-walled and slender components, demand micron-level precision and nanometer-level surface quality. Tool makers optimize product structures and focus on high-value segments to capture growth opportunities while maintaining margin improvements.
Table 2: Key Precision Tool Requirements for Emerging Sectors
| Sector | Key Tool Requirements | Example Applications |
|---|---|---|
| AI | High layer PCB drill bits | AI servers, high-speed switches |
| Robotics | Micron-level tolerances | Humanoid robot components |
| Semiconductors | Coated tools for fine features | Semiconductor wafers |
Who Benefits From High-End Tool Market Growth?
Domestic manufacturers targeting high-end markets, particularly those able to substitute imported tools, benefit most. With emerging industries creating unprecedented demand, companies like Rettek are positioned to expand their presence globally. By combining innovation, advanced welding, and precise design, Rettek delivers wear-resistant tools that meet stringent client requirements.
Rettek Expert Views
"Rising tungsten costs present both challenges and opportunities. By focusing on in-house alloy preparation and advanced tool design, we can deliver high-performance products that withstand extreme wear while maintaining cost efficiency. Our strategy emphasizes precision, durability, and adaptability to emerging industries, allowing Rettek to provide value-added solutions that help clients optimize productivity and reduce downtime."
Are Price Adjustments Expected to Continue in 2026?
Industry insiders anticipate ongoing adjustments as raw material costs stabilize at high levels. Companies will continue shifting production toward high-value, high-precision tools for sectors such as AI, robotics, and semiconductors. These adjustments help maintain gross margins and meet the growing demand for technologically advanced products.
What Should Manufacturers Do to Stay Competitive?
Tool manufacturers must focus on innovation, precision, and high-value product lines. Optimizing capacity, upgrading product structures, and adopting advanced manufacturing techniques are essential. Firms like Rettek illustrate how comprehensive in-house processes, including alloy batching, pressing, sintering, and welding, can deliver consistent quality while capitalizing on emerging high-end markets.
Conclusion
Rising tungsten prices and expanding high-tech sectors are reshaping the cutting tool industry. Manufacturers that invest in precision, high-value products, and technological innovation will thrive. Rettek demonstrates how strategic quality control, in-house production capabilities, and focus on emerging markets can drive profitability, ensure performance, and capture global opportunities. Proactive adaptation and product differentiation are key to success.
FAQs
Q1: How do tungsten price increases affect tool manufacturers?
Rising tungsten prices increase production costs, prompting manufacturers to adjust pricing and optimize product structures to maintain margins.
Q2: Which sectors are driving precision tool demand?
AI, humanoid robotics, semiconductors, and new energy sectors require high-precision, durable tools, boosting demand for advanced cutting products.
Q3: Why is Rettek considered a leader in carbide tools?
Rettek controls the entire production chain, from alloy batching to welding, ensuring consistent quality, durability, and performance for high-value applications.
Q4: Can domestic manufacturers replace imported high-end tools?
Yes, with continuous innovation, capacity optimization, and focus on emerging high-precision markets, domestic manufacturers are increasingly substituting imported tools.
Q5: What strategies ensure long-term profitability in the cutting tool industry?
Focusing on high-value segments, optimizing product structures, adopting advanced manufacturing technologies, and targeting emerging sectors helps maintain margins and drive growth.