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| US midterm elections |
US midterm elections present unprecedented risks for domestic critical materials investments and secondary metal recycling supply chains. Since January 2025, the Trump administration has committed over US$40Bn across 160 domestic mineral deals to challenge China’s dominant market position. Meanwhile, escalating geopolitical tensions in the Middle East have severely strained global refining capacity for tungsten, gallium, helium, and sulphur. Strategic investors and scrap metal processors now face mounting legal uncertainty alongside severe raw material shortages as congressional oversight threatens project pipelines.
Escalating Congressional Oversight Risks Stifling Capital Expenditure
A potential Democratic victory in either house will trigger aggressive investigations into federal critical materials funding. Lawmakers previously raised concerns regarding Cantor Fitzgerald and potential conflicts of interest involving executive branch family members. Consequently, targeted critical materials producers face prohibitive legal defense costs and protracted regulatory delays. Furthermore, heightened subpoena risks threaten to stifle ongoing private equity investments in primary extraction and secondary metal recycling ventures.
Middle East Conflict Drives Severe Raw Material Supply Deficits
Ongoing hostilities in Iran have severely depleted US defense stockpiles of critical tungsten and gallium reserves. China currently controls 80% of global tungsten output and 98% of refined gallium production, limiting strategic replenishment options. Meanwhile, the closure of the Strait of Hormuz has trapped one-third of commercial helium supplies within the Persian Gulf. As a result, soaring sulphur prices directly inflate hydrometallurgical processing costs for copper, nickel, and rare earth elements.
ScrapInsight Commentary
* Midterm election dynamics introduce severe policy friction that threatens domestic critical materials refining and metal recycling investments.
* High acid prices and raw material shortages accelerate the imperative for circular scrap processing and regional closed-loop recycling networks.
* Strategic market players must hedge against prolonged Persian Gulf trade disruptions while preparing for expanded compliance and environmental disclosure requirements.
