What Kennametal Inc. told the SEC could break it.

As a globally sourced and globally manufacturing industrial company (60% of sales outside the U.S.; plants across Germany, India, China and elsewhere), Kennametal is directly exposed to evolving trade policy and tariffs. It quantifies the impact: the unmitigated net effect from increased tariffs was approximately $4 million during fiscal 2025, and it has responded with tariff-mitigation actions including surcharges on certain product sales and, where appropriate, rerouting internal supply chains. Further tariff escalation could decrease demand, raise input costs faster than pricing/sourcing can offset, and increase impairment risk. A concrete, quantified, already-incurred trade-policy cost channel.

“The unmitigated net effect from increased tariffs was approximately $4 million during fiscal 2025.”

Kennametal's core products contain hard metals — tungsten and cobalt — and hard-metal dust is under study for potential adverse health effects by regulatory and scientific bodies in the U.S., Europe and Japan. If future studies lead to classification of its products (or their manufacturing dust) as hazardous, Kennametal could face increased compliance, manufacturing, handling and product-liability costs, or restrictions on certain products. This is a distinct regulatory tail risk tied specifically to the materials that define its product line, separate from the tariff and raw-material-sourcing channels.

“Certain of our products contain hard metals, including tungsten and cobalt. Hard metal dust is being studied for potential adverse health effects by organizations in several regions throughout the world, including the U.S., Europe and Japan.”

Kennametal's cutting tools, carbide inserts and metallurgical powders are built on a defined set of critical metallurgical inputs — tungsten ore concentrates and scrap carbide (to make tungsten oxide) plus cobalt as a secondary binder material. It discloses that its major sources for these raw materials are located abroad, which matters acutely because tungsten and cobalt are critical minerals with concentrated, China/foreign-dominated supply and have been targets of export-control actions. The company partially mitigates via long-term supply agreements, spot purchases, internal tungsten recycling, and an owned tungsten-concentrate operation in Bolivia, but a foreign supply disruption or export restriction on tungsten/cobalt would directly raise input costs and threaten production. A specific, named critical-mineral dependence.

“Our major metallurgical raw materials consist of tungsten ore concentrates and scrap carbide, which are used to make tungsten oxide, as well as compounds and secondary materials such as cobalt.”