North Korea's Won Slides as Tungsten Prices Deliver a China Windfall

North Korea's economy in the first half of 2026 was shaped by two largely unrelated forces, according to an analysis published by 38 North, the Stimson Center's North Korea program. One was a steep slide in the value of the won; the other was an unexpected windfall from tungsten and other mineral exports to China. Together, author Jinwook Nam argues, they show that Pyongyang can still earn hard currency when world prices move its way, even as it loses control of its own money at home.

The won's decline was dramatic. On informal markets, the US dollar climbed to a May peak roughly 90 percent above its January level, rising from about 37,250 won to 70,800 won before easing in June. Won-denominated prices for rice, corn, gasoline and diesel roughly doubled over the same stretch. Measured in dollars, however, those same staples barely moved, signaling that depreciation, not scarcity, drove the surge. Over a longer horizon the dollar's price in won has jumped around seven-and-a-half-fold since early 2024.

The report attributes the slide primarily to domestic causes rather than a shortfall in foreign earnings. One driver is monetary: a campaign since late 2023 to revive the planned economy lifted nominal public-sector wages roughly tenfold, and reportedly 40 to 50 times in priority sectors, alongside higher state-set prices. Paying out far more won without matching output amounts to monetary expansion. A second driver is expectational, as households and traders flee the won for dollars and yuan, a distrust rooted in the failed 2009 currency redenomination.

The burden has fallen unevenly. Traders and the entrepreneurial donju class, who earn or hold hard currency, largely preserved their purchasing power. State wage earners paid in won faced a sharp, regressive shock as food and fuel costs doubled within months.

The second story was a mineral windfall. Exports to China rose 68 percent year-on-year over January to May, reaching $287 million, with roughly two-thirds of that increase from a single line: tungsten ore, whose value leapt nearly tenfold to $88 million from about $9 million a year earlier. The gain was almost entirely about price. Shipment volumes rose only about 15 percent, while the average unit value jumped from around $8 to nearly $70 per kilogram, spiking above $90 in March and April before halving to roughly $48 in May.

The cause lay outside North Korea. China, which controls more than three-quarters of global tungsten supply, placed tungsten products under export licensing in February 2025 and tightened controls into 2026, sending benchmark prices sharply higher. As a marginal supplier to Chinese processors, North Korea earned far more for roughly the same volume. Tungsten ore even narrowly overtook wigs and false hair as the North's top export to China for the first time, shifting the trade profile toward a commodity whose price Pyongyang neither sets nor controls.

Still, the analysis cautions that the windfall does little to change North Korea's external accounts. The extra earnings of roughly $16 million a month are dwarfed by a $194 million monthly import bill, leaving the trade deficit with China essentially flat. Looking ahead, the report says the won's path will hinge on how much liquidity authorities keep injecting for priority projects, while the tungsten boom will rise and fall with a market set in Beijing. Chinese President Xi Jinping's June 8-9 state visit to Pyongyang, his first since 2019, could expand trade and support, but past Chinese assistance has rarely proved transformative.