China Imposes Export Controls on Rare Earths, Shaking Global Supply Chains

China Rare Earths

New Export Restrictions Target Samarium, Terbium, Dysprosium, and Other Critical Elements

China has imposed immediate export controls on a wide array of rare earth elements, including samarium, terbium, dysprosium, and yttrium. The controls also affect alloys, NdFeB magnets, and samarium-cobalt permanent magnets, deepening global concerns about rare earth supply security.

This move aligns with China’s dual-use item control scheme, formalized last year through new legislation. The Ministry of Commerce stated the action reflects international norms for items with both civilian and military applications.

However, the timing is widely viewed as retaliation against recent US tariffs. Over the past two years, China has imposed controls on other strategic metals, including gallium, germanium, and graphite, amid intensifying geopolitical tensions with Western nations.

Global Markets Brace for Disruption as Permit Delays and Shortages Loom

Exporters must now submit documentation verifying both end-user and end-use, with immediate suspension of exports if changes occur. Though the official permit process takes 45 days, actual approvals may be delayed depending on destination countries.

Past implementation of similar schemes caused price spikes in metals like antimony and bismuth, as exporters struggled to receive permits. The European antimony market currently trades at historically high premiums due to such restrictions.

In this new round, heavy and medium rare earth exports may decline significantly, given the processing uncertainties. The rules apply globally—not just to the US—raising concerns across Japan, Korea, and Europe.

US and Japan Face Supply Shock as China Tightens Rare Earth Dominance

China supplies over 90% of the world’s rare earths, making the new controls especially impactful for US and Japanese industries. The US lacks alternative sources for heavy rare earths like dysprosium and terbium, with Lynas Malaysia not expected to deliver separated output until 2025.

Japan, a key importer of dysprosium and terbium, is highly exposed. Traders warn that non-Chinese suppliers may raise prices in response, although ramp-up timelines for new mines remain uncertain.

Meanwhile, Chinese imports of US rare earth ores may fall due to Beijing’s new 34% retaliatory tariffs, though this will have limited domestic impact, as China sources much of its supply from Myanmar, Laos, and internal mines.

The Metalnomist Commentary

China's rare earth export controls signal a new escalation in materials diplomacy. With the West struggling to develop non-China supply chains, this move could accelerate diversification efforts—but not without short-term disruptions. For global industries relying on permanent magnets and high-tech alloys, the clock is ticking.