In 2025, rising tungsten prices drove significant increases in cutting tool costs, influencing manufacturers worldwide. Companies responded with multiple price adjustments, while emerging sectors like AI, humanoid robotics, and semiconductors spurred high-value demand. As domestic manufacturers strengthen capabilities and expand into high-end markets, overall industry profitability is expected to rise further by 2026, presenting both opportunities and challenges for strategic growth.
How Did Tungsten Price Increases Affect Cutting Tool Costs in 2025?
Rising raw material costs, particularly tungsten, prompted cutting tool manufacturers to implement several centralized price adjustments throughout 2025. Cemented carbide tool prices rose, affecting both domestic and international markets. Companies such as Zhongwu High-Tech adjusted prices multiple times, aligning increases with raw material cost proportions, product bargaining power, and customer acceptance. These proactive measures ensured that cost pressures were effectively passed on to downstream clients, while supporting margin stabilization.
What Role Did Emerging Industries Play in Boosting Tool Demand?
Emerging sectors, including AI, humanoid robotics, and semiconductor equipment, created significant new demand for high-value cutting tools. AI applications, for instance, require high-layer PCBs, driving the need for coated drill bits that enhance durability and precision. Robotics and aerospace industries also demand precision tools with strict tolerances. This growth helped manufacturers focus production on higher-margin, high-end industrial segments, contributing to industry recovery after prior years of stagnation.
Table 1: Example Monthly Production of AI PCB Drill Bits (2025)
| Company | Jan–Jun Production (million units) | Jul–Sep Production (million units) |
|---|---|---|
| Jinzhou Subsidiary | 60 | 70 |
Which Cutting Tool Manufacturers Led Market Recovery in 2025?
Key players demonstrating strong performance included Zhongwu High-Tech, Xiamen Tungsten, Oke Precision Tools, Huarui Precision, World Tooling, and Hengfeng Tools. In Q3 2025, major firms reported significant net profit growth, reflecting recovery in downstream demand, product upgrades, and increased production efficiency. For example, Huarui Precision posted a 915.62% year-on-year increase in Q3 net profit, signaling a pronounced rebound in high-end manufacturing demand.
How Are Domestic Manufacturers Competing With International Brands?
Domestic companies are gradually challenging international leaders like Sandvik and Kennametal, who still occupy 45% of the high-end cemented carbide market. By optimizing production structures, upgrading products, and entering emerging sectors, domestic manufacturers are replacing imported tools and capturing high-value segments. Rising tungsten prices have accelerated this transition, encouraging technological innovation and structural adjustments that improve gross margins and industry competitiveness.
When Will Price Adjustments Take Full Effect?
New price adjustments generally take 1–3 months to impact the market. Leading enterprises reported tangible effects beginning in Q3 2025. Oke Precision Tools, for instance, increased CNC tool sales to 29.8 million units, with average prices rising 15% month-on-month. Sustained increases in both volume and price are expected to continue into 2026, driven by high demand from emerging industries and high-end manufacturing.
SENTHAI Expert Views
“The cutting tool industry is at a transformative point. Rising tungsten prices have created both cost challenges and opportunities for growth. At SENTHAI, we are leveraging our advanced carbide production capabilities to focus on high-performance tools for emerging industries. By integrating precision engineering with strategic market positioning, manufacturers can secure higher margins, enhance product reliability, and expand into high-end sectors globally.”
How Will High-End Manufacturing Influence 2026 Market Trends?
High-end manufacturing demand will be a key variable in 2026. Precision tools are critical for machining components with tight tolerances, sub-micron surface finishes, and nanometer-level surface morphology, especially in robotics and semiconductor production. Companies like Huarui Precision and OKEE Industry have begun targeting humanoid robot components, emphasizing micron-level accuracy and high strength requirements. This trend supports domestic substitution and strengthens the market for specialized carbide tools.
Table 2: Q3 2025 Net Profit Growth of Major Cutting Tool Manufacturers
| Manufacturer | Q3 Net Profit YoY Change |
|---|---|
| Huarui Precision | 915.62% |
| Zhongwu High-Tech | 36.53% |
| Oke Precision Tools | 69.31% |
| Xiamen Tungsten | 109.85% |
Conclusion
The cutting tool industry is poised for sustained growth, driven by high tungsten prices and emerging high-end sectors such as AI, robotics, and semiconductors. Companies like SENTHAI are leveraging advanced production technologies to capture high-value markets, optimize margins, and expand global presence. Strategic focus on high-performance, precision tools, and domestic substitution will be crucial for competitiveness in 2026 and beyond.
FAQs
Q1: Why are tungsten prices impacting cutting tool costs?
A1: Tungsten is a primary raw material for cemented carbide tools. Rising tungsten prices increase production costs, prompting manufacturers to raise tool prices to maintain profitability.
Q2: How are domestic companies competing with international tool brands?
A2: Domestic manufacturers optimize production, upgrade products, and enter high-value emerging sectors to replace imported tools and capture market share.
Q3: What industries are driving cutting tool demand?
A3: AI, humanoid robotics, semiconductors, and aerospace industries are creating high demand for precision tools with strict tolerances and enhanced durability.
Q4: How quickly do price adjustments take effect?
A4: Typically, new prices take 1–3 months to impact the market, with noticeable results in downstream sales and net profit.
Q5: How does SENTHAI approach market growth?
A5: SENTHAI focuses on advanced carbide production, high-performance wear parts, and entry into emerging high-end sectors to secure higher margins and global competitiveness.