Samarium Oxide Export Prices Fall as Lynas Output Pressures Chinese Offers

Lynas

Samarium oxide export prices fell as Chinese suppliers lowered offers in response to Lynas’ first samarium oxide production at its Malaysian refinery. The 99.5% samarium oxide export range dropped to $6-8/kg fob China after reaching a record $11-14.50/kg in late February.

The price decline reflected a shift in market sentiment rather than a full easing of supply constraints. Chinese export permits remain difficult to obtain, especially for shipments to Japan, but Lynas start-up introduced a credible non-China supply route for downstream users.

Samarium oxide export prices had surged earlier because of China’s tighter export control framework for medium and heavy rare earths. The emergence of Lynas output has now weakened the pricing leverage of some Chinese sellers, even though China still dominates global samarium supply.

Lynas Start-Up Adds Non-China Supply for SmCo Magnet Producers

Lynas produced first samarium oxide at its Malaysian refinery on 19 March, adding another separated heavy rare earth product to its portfolio. The company is the only commercial producer of separated samarium, terbium and dysprosium outside China.

The Australian producer is expected by market participants to raise samarium output to about 1,100 t/yr. That volume could be enough to cover a meaningful share of downstream demand in Japan, where samarium-cobalt magnet manufacturing is concentrated outside China.

Samarium-cobalt magnets are used in high-temperature and high-reliability applications across aerospace, defense, automotive, electronics and advanced industrial systems. The material’s strategic value is higher than its market size suggests because SmCo magnets are difficult to replace in demanding environments.

Lynas also plans to expand its product line to include gadolinium, yttrium and lutetium over the next two years. This would further strengthen non-China supply options for selected medium and heavy rare earth oxides.

China Export Controls Still Shape Samarium Market Risk

China continues to control more than 90% of global samarium oxide supply, with global production estimated at about 4,900t in 2025. Output is expected to rise to around 5,000t in 2026 as Lynas adds volume and Chinese production remains steady.

Beijing’s export restrictions remain the main structural risk. China has placed samarium, gadolinium, dysprosium, terbium, yttrium, lutetium and scandium under tighter export controls from 4 April, adding uncertainty for buyers outside China.

Japan is particularly exposed because it is China’s largest buyer of samarium products, accounting for more than 85% of Chinese shipments. Japanese buyers have reported difficulties securing export permits for samarium products since late October, following a sharp deterioration in China-Japan relations.

The price correction therefore does not mean the market has fully normalised. Samarium oxide export prices are now being pulled in two directions: Lynas is weakening China’s supply monopoly, while Chinese licensing controls continue to restrict trade flows into key magnet markets.

The Metalnomist Commentary

Lynas’ samarium start-up shows how even modest non-China output can change rare earth pricing psychology. However, China’s export licensing power remains decisive, especially for Japan’s SmCo magnet industry.

China EU Dual-Use Export Controls Raise Rare Earth Supply Risk for Europe

China EU

China EU dual-use export controls have escalated after Beijing added seven military-related European entities to its export control list. The move signals a sharper trade dispute between China and the EU and could increase uncertainty around rare earths and critical metals supply to Europe.

China EU dual-use export controls prohibit domestic exporters from supplying listed entities with controlled dual-use goods, technologies and services. Overseas organisations and individuals are also barred from transferring Chinese-origin dual-use items to those entities.

China EU dual-use export controls are significant because rare earths, tungsten, antimony, germanium and gallium have all gained stronger military and strategic relevance. Many of these materials are already covered by China’s dual-use export control framework.

The targeted entities include defence, aerospace and military-linked companies in Europe. Beijing said the companies had engaged in arms sales to Taiwan or had links with Taiwan-related activity.

Rare Earths and Critical Metals Become Trade Policy Tools

China’s decision marks the first time Beijing has imposed dual-use export restrictions specifically targeting EU entities. It shows that critical materials policy is increasingly being used as a geopolitical instrument.

The move follows growing friction between China and the EU, including disputes around cybersecurity rules and alleged discriminatory treatment of Chinese companies. Beijing has warned that it could take broader countermeasures if Chinese firms continue to face restrictions.

This matters for Europe because the region remains a major buyer of Chinese rare earths and critical minerals. The Netherlands, Italy, France and Spain all received rare earth shipments from China in the first quarter.

Rare earths are essential for permanent magnets, electric motors, wind turbines, robotics, defence systems, aerospace components and precision electronics. Heavy rare earths such as dysprosium and terbium are especially important for high-performance magnets used in demanding operating environments.

Other controlled critical metals also carry strategic weight. Tungsten is used in hard metals, defence systems and high-temperature applications. Antimony supports flame retardants, ammunition and alloys. Germanium and gallium are critical for semiconductors, optics, satellites and power electronics.

China’s use of export controls has become more systematic. Beijing has already tightened critical minerals exports to Japan this year, which disrupted shipments of dysprosium and terbium and forced buyers to seek alternative supply.

Europe Faces Higher Security Premiums for Heavy Rare Earths

Europe’s immediate risk is not a full loss of Chinese supply. The more likely impact is higher compliance risk, licensing uncertainty and greater pressure on buyers that need controlled materials for defence, aerospace and advanced manufacturing.

This could widen the security premium for non-China rare earths and minor metals. Buyers without reliable export licences may need to pay more for material available in the Atlantic market.

Heavy rare earth prices outside China have already surged because of tight availability and stronger Japanese buying. Yttrium oxide prices in Europe have climbed sharply this year, reflecting the scarcity of prompt non-China supply.

If EU-China tensions continue, European buyers may accelerate efforts to diversify supply. That could benefit projects in Australia, Brazil, Estonia, the US and other jurisdictions trying to build rare earth separation, metal-making and magnet capacity outside China.

However, diversification will not be quick. Rare earth supply chains require mining, separation, refining, metal conversion, alloying and magnet manufacturing. Each stage needs qualification, capital and technical expertise.

For European manufacturers, the policy signal is clear. Critical metals procurement can no longer rely only on price and delivery time. Buyers must now evaluate origin risk, licensing exposure, dual-use classification and strategic inventory needs.

The broader market implication is that China’s critical minerals controls are becoming a routine part of trade policy. Europe must now treat rare earths and minor metals as supply-chain security issues, not just raw material inputs.

The Metalnomist Commentary

China’s latest export control move shows that rare earths and minor metals are becoming geopolitical leverage points. Europe’s challenge is no longer just finding alternative supply, but building a complete industrial chain that can survive licensing shocks.

China export VAT rebate cuts reshape solar PV and battery exports

China Solar

China export VAT rebate cuts will raise the effective cost of exporting solar PV and batteries. China export VAT rebate cuts start on 1 April and tighten again in 2027. As a result, exporters face a faster push toward pricing discipline and higher-value products.

China will withdraw the export VAT rebate for solar photovoltaic products from 1 April. China supplies most global solar PV exports, so buyers will feel the shift quickly. Therefore, the policy targets over-expansion and the harsh price war across the sector.

Solar PV exporters face an immediate margin reset

Solar PV exporters will lose a rebate tailwind overnight. Producers will either accept lower margins or lift export prices where contracts allow. Meanwhile, weaker players may accelerate shutdowns, mergers, or capacity delays.

The change also encourages differentiation in higher-efficiency cells and modules. Companies will likely prioritize premium segments and branded channels. However, low-end volume exports will become harder to justify.

Battery exports move into a two-step phaseout

Battery export VAT rebates will fall to 6pc from 9pc between 1 April and 31 December 2026. The rebate will disappear from 1 January 2027. As a result, battery makers may adjust product mix, contract terms, and overseas inventory strategy.

China dominates battery materials and power battery supply, so the policy touches global EV and storage chains. Beijing also widened its export licensing scope to include BEVs from 1 January. Meanwhile, regulators are signaling stricter rules to standardize competition across batteries.

The Metalnomist Commentary

This policy looks like an industrial reset, not a trade accident. It pressures excess capacity and forces a quality-led export model. However, the biggest impact will land on low-margin suppliers first.

Tungsten Market Faces Disruptions as China Imposes Export Controls on APT

Ammonium Paratungstate

The recent announcement by China to place ammonium para-tungstate (APT) and tungsten concentrate under strict export controls has sparked significant price increases in the European market. As buyers scramble to secure material, European consumers are seeking to build "safety stocks" to ensure supply continuity amid the uncertainty surrounding these export restrictions.

China's Export Controls Create Supply Chain Concerns

China's decision to add APT and tungsten concentrate to its list of dual-use items has left global tungsten buyers on edge. With this new regulation, Chinese suppliers have hesitated to provide fresh price quotes, waiting for clearer instructions and permits from the Chinese government. This delay in pricing is expected to persist for around 45 days, further exacerbating concerns in the tungsten market.

As the export controls limit available material, European and Japanese markets are expected to feel the greatest impact. While U.S. buyers primarily rely on tungsten scrap for their needs, prices for this resource are also expected to rise due to the overall global tightness in tungsten supply. European buyers are particularly active in sourcing material outside of China, not due to increased demand, but to secure stock ahead of anticipated supply disruptions.

Verification of End-Use Creates Delays and Bottlenecks

The new export regulations require Chinese exporters to notify authorities of the final end-user and application of the tungsten products, adding another layer of complexity to the supply chain. The verification process, which ensures that the material isn't being used for military purposes, is expected to create significant delays. With approximately 70% of Japan's tungsten imports coming from China, these controls are likely to disrupt the Japanese market the most. The European Union also faces similar challenges, with imports from China making up a substantial portion of its tungstate needs.

Impact on Global Markets and Price Forecasts

While the Chinese export restrictions are expected to drive prices up, particularly in Europe and Japan, the full impact remains uncertain. Tungsten is crucial for a variety of industrial applications, with APT serving as the intermediate material for producing tungsten oxides and powders. However, with limited available stock and supply chain disruptions, some market participants worry that the price increases could become more drastic.

The situation has drawn comparisons to China's antimony export delays, which have significantly disrupted the European market and caused prices to surge. The tungsten market may face similar challenges as supply becomes even more constrained, with both APT and tungsten concentrate prices continuing to climb.

Conclusion: A Fragile Market with Rising Prices

As the global tungsten market grapples with China's export controls, prices for APT and tungsten concentrates are likely to remain volatile. The duration and enforcement of these new controls will determine the severity of the price hikes, and the market will need time to adjust to the changing dynamics. With Europe and Japan facing the most significant challenges, the tungsten supply chain will need to adapt to avoid further disruption.

Europe Rare Earth Prices Hold Steady as China’s NdPr Market Softens

Rare Earth mining

Europe rare earth prices held broadly steady this week as tight heavy rare earth availability offset weakness in China’s neodymium and praseodymium market. Delivered European prices for light rare earths showed little movement, while prompt supply of restricted heavy rare earths remained extremely limited.

Europe rare earth prices are now being shaped by two different market structures. Light rare earths are tracking weaker Chinese sentiment more closely, but European demand remains modest and supply is sufficient. Heavy rare earths are trading under export-control pressure, with buyers outside China paying steep premiums for prompt material.

Europe rare earth prices therefore show a widening split between ordinary demand softness and strategic scarcity. The market is not moving as one rare earth complex. It is separating by licensing access, material origin, availability and end-use urgency.

Light Rare Earths Stay Flat Despite Chinese Market Drop

European delivered neodymium oxide prices remained steady at $115-130/kg cif Europe. Neodymium metal also held at $145-160/kg cif.

Praseodymium oxide stayed unchanged at $115-130/kg cif Europe, while praseodymium-neodymium oxide held at $110-115/kg cif. The stability came despite a sharp decline in China’s NdPr complex.

Chinese traders have been destocking ahead of the 1-5 May Labour Day holiday, expecting weaker domestic end-user demand. Several oxide producers suspended spot offers to assess market direction.

European prices did not follow the Chinese decline because regional spot demand remains limited. Delivered European prices are already below Chinese values on average, supported by sufficient supply from multiple sources.

Cerium oxide moved slightly higher, with the top end of the range rising to $2.55/kg cif Europe. Demand is being supported by increased use of cerium-based rare earth magnets and higher freight costs for material circulating outside China.

This light rare earth stability suggests that Europe is not facing immediate NdPr scarcity. However, buyers remain cautious because Chinese price movements still influence sentiment and replacement-cost expectations.

Heavy Rare Earths Remain Tight Under Export Controls

Heavy rare earth availability remains the main pressure point in Europe. Delivered prices for dysprosium oxide were unchanged at $1,000-1,200/kg cif Europe, while terbium oxide held at $3,800-4,500/kg cif.

Spot liquidity has been thin since the start of the year. Prompt availability outside China remains very tight, especially for buyers without export licences.

China’s export controls continue to reshape heavy rare earth pricing. End-users that cannot access licensed Chinese supply are still willing to pay steep premiums to secure material for magnets, defence systems, electronics and advanced manufacturing.

Japanese buying interest has added more pressure since Japan became subject to stricter export controls in January. This has increased competition for limited non-China prompt supply.

The same pattern is visible in gadolinium and yttrium. Gadolinium oxide remained at $700-1,200/kg cif Europe, while yttrium oxide held at $800-1,200/kg cif Europe.

These markets are no longer priced only by Chinese domestic fundamentals. They are being priced by export-control access, available inventories and the cost of avoiding production disruption.

For European buyers, the practical issue is security of supply. Even if Chinese domestic prices soften, restricted material outside China can remain expensive because availability is controlled by licensing and logistics.

The result is a rare earth market where light rare earths may soften with Chinese demand, while heavy rare earths retain a strategic premium. That premium is likely to persist as long as export controls limit access to dysprosium, terbium, gadolinium and yttrium.

The Metalnomist Commentary

Europe’s rare earth market is becoming increasingly divided between price-led light rare earths and security-led heavy rare earths. China’s NdPr weakness matters, but export-control pressure on dysprosium, terbium, gadolinium and yttrium is now the stronger strategic signal.

Bushveld Mineral

South African Output Cuts to Boost China's Vanadium-Nitrogen Exports

Rising Exports Driven by Lower South African Production and Strong US Demand

China’s vanadium-nitrogen exports are expected to see significant growth in 2025, primarily due to output cuts from a major South African producer, increasing demand from the US, and strong export interest from Chinese producers. Market participants anticipate a boost in global vanadium-nitrogen trade, benefiting China’s export numbers.

Impact of South African Output Cuts on Global Vanadium-Nitrogen Supply

South African vanadium-nitrogen production has been notably impacted by ongoing equipment maintenance at Bushveld Minerals Vametco plant. From mid-December to March 2025, the plant will operate at reduced capacity due to a cash shortage. In 2024, Bushveld’s production fell by 19%, amounting to 1,387 tonnes. This reduction in South African output is expected to continue in 2025, with the producer operating at low run rates due to negative profit margins. Consequently, China is positioned to capitalize on these cuts by increasing its exports.

Global vanadium-nitrogen alloy production is heavily concentrated in China and South Africa, with other countries lacking the necessary technology due to intellectual property restrictions. While European and US steel mills often prefer using ferro-vanadium (80% grade) over vanadium-nitrogen, China’s export increase in vanadium-nitrogen reflects changing dynamics in the alloy market.

Surge in China’s Vanadium-Nitrogen Exports and US Market Demand

China’s vanadium-nitrogen exports more than doubled in 2024, reaching 2,523 tonnes, up from 945 tonnes in 2023. This growth can be attributed to South Africa’s lower output and China’s expanded export activities. Notably, in December 2024, China’s vanadium-nitrogen exports surged five-fold to 377 tonnes, compared to just 67 tonnes a year earlier.

The US was the largest buyer of Chinese vanadium-nitrogen in 2024, importing 892 tonnes, more than double the 335 tonnes purchased in 2023. Canada also saw a dramatic increase in imports, with 323 tonnes imported, a more than five-fold rise from 60 tonnes in 2023. India’s demand also increased by 69%, reaching 317 tonnes in 2024. The US demand for vanadium-nitrogen is expected to continue to rise, as the US government, under President Trump, has pledged to boost domestic construction activities, which will likely increase the demand for steel alloys.

Export Prices and Market Dynamics

Chinese export prices for vanadium-nitrogen are currently in the range of $20.30 to $21 per kilogram, lower than European prices of $23.80 to $24.20 per kilogram. Chinese smelters are more inclined to sell to overseas markets to address domestic oversupply issues. In 2024, China produced 41,500 tonnes of vanadium-nitrogen, surpassing domestic steel mills' consumption of 34,800 tonnes. However, some alloy smelters reduced production from 2023 levels due to negative profit margins and weaker steel demand.

China Expands Export Controls on Critical Minerals Amid Trade Tensions

China Critical Minerals

New Restrictions on Tungsten, Indium, and Other Critical Metals

China has intensified its trade strategies by imposing new export controls on additional critical minerals. This move is seen as a countermeasure against higher tariffs recently imposed by the United States. The newly restricted materials include various metals and compounds of tungsten, indium, tellurium, bismuth, and molybdenum. The export restrictions came into effect on February 4, as announced by China’s Ministry of Commerce.

Impact on Global Supply Chains

This expansion of export controls follows the introduction of similar measures in 2023-24, which included key materials such as gallium, germanium, graphite, and antimony. With the recent addition, the scope now covers more crucial metals used in various industries globally. According to industry estimates, China holds a dominant share of the global supply for metals like tungsten and bismuth. For instance, it is the world’s largest producer and exporter of tungsten, controlling nearly 80% of the global market. Similarly, China is responsible for 70-80% of the world's bismuth supply, which further underscores its influential role in the global supply chain.

The new export controls will allow China greater flexibility in deciding which countries can receive these critical minerals. Market participants have indicated that the export restrictions could drive up global prices, especially for tungsten and bismuth, due to China's near-monopoly on these materials. This is likely to cause disruptions for industries that rely heavily on these metals, from electronics to energy production.

Global Repercussions and Market Shifts

The broader implications of these controls may be felt across various sectors. As China continues to tighten its grip on critical mineral exports, consumers outside of China will face challenges in securing alternative sources of supply. However, some experts suggest that this move might spur increased investments in local production capabilities in non-China markets, as countries seek to reduce their dependence on Chinese supplies.

In the short term, global markets will likely experience higher prices for the affected minerals, particularly as exporters must follow a stringent verification process before shipping these critical materials. The procedural delays and uncertainty about permitted shipments will add to the volatility of the market.

Conclusion: Strategic Maneuver in Global Trade

China's latest export controls reflect a growing trend of resource nationalism, where nations leverage their dominance in critical industries to secure economic and political advantages. These measures come amidst heightened trade tensions, particularly with the United States, and are designed to protect China’s national security and economic interests. As the global demand for these minerals continues to rise, China’s role in the critical metals supply chain remains pivotal, making it essential for businesses worldwide to monitor these developments closely.

China Imposes Export Controls on Heavy Rare Earths in Retaliation to US Tariffs

China Rare Earths

New Legislation Strengthens Dual-Use Item Export Control Scheme

In a move likely aimed at countering US President Donald Trump’s recent tariffs, China has extended its export control measures to cover several medium and heavy rare earths. The new controls, announced on April 4, target elements such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These minerals are critical in various high-tech and defense applications, and their export restrictions will likely have significant geopolitical and market implications.

China’s Dual-Use Export Control Scheme

The Chinese Ministry of Commerce emphasized that the materials affected by these new controls possess "dual-use" properties, which means they can be used for both civilian and military applications. Export controls on such items are considered a standard international practice. This move aligns with China’s enhanced dual-use item management scheme, which was bolstered by new legislation passed in October 2023. The new regulations require exporters to submit detailed documents confirming the end-user and the intended use of the items. Should the end-user or the intended use change, exporters are required to halt the shipment immediately.

While the export control scheme is part of a broader effort to regulate strategic materials, it has been widely viewed as a retaliatory response to the US’s 34% reciprocal tariffs, announced on April 2. In recent years, China has also placed export controls on other critical minerals like gallium, germanium, and graphite, in response to escalating tensions with the US and Western nations.

Strategic Implications and Market Reactions

China is a dominant player in the global rare earth market, accounting for over 90% of global supplies. The country’s total shipments of rare earths dropped by 3% in January-February 2024, compared to the same period the previous year, according to customs data. The US, recognizing its dependence on China for these materials, has taken steps to boost domestic production and diversify its supply sources, including funding initiatives in countries like Greenland, which has significant rare earth reserves.

Most market participants previously expected China to hold back on using rare earths as a "last card" in the trade war due to the strategic importance of these materials in many high-tech applications. However, China’s decision to implement these export controls highlights its readiness to leverage its position in the rare earth market. This policy shift is expected to further strain the rare earth supply chain and could result in higher prices for materials such as antimony and bismuth, which have already seen price surges following previous export restrictions.

Indium Phosphide Exports Become China’s New Chokepoint in AI Data Centre Supply Chain

AI data centre

Indium phosphide exports have become a strategic pressure point in the global AI data centre supply chain as China’s licensing controls delay shipments of a material essential for high-speed optical chips. The restrictions are exposing a new vulnerability in AI infrastructure: the physical materials behind silicon photonics and optical interconnects.

The issue has moved quickly from a specialist semiconductor concern to a high-level trade and industrial policy problem. Coherent, a key optical components supplier backed by Nvidia, warned in early May that indium phosphide shortages were already affecting the market. Its chief executive then joined a US business delegation to China as companies sought relief from export licence delays.

Indium phosphide exports matter because AI data centres are moving beyond copper-based interconnects. As AI workloads grow, hyperscalers need faster, lower-latency and more energy-efficient data transmission between processors, accelerators, switches and optical modules. Indium phosphide is one of the core materials enabling that shift.

The material is used in high-speed optical chips, lasers, detectors and photonic components. These devices support the optical links that move huge volumes of data across AI clusters. Without reliable indium phosphide substrates and wafers, the expansion of advanced AI data centre networks could slow.

China’s control over indium phosphide exports shows that critical materials policy is becoming more granular. Beijing no longer needs to restrict only rare earths or finished technology products. It can also influence upstream compounds, substrates and wafers that determine whether advanced semiconductor supply chains can scale.

Export Controls Expose a Hidden Bottleneck in Silicon Photonics

Silicon photonics has become a critical technology for AI infrastructure because it allows data to move through light rather than electrical signals. This reduces energy use per bit and supports the bandwidth required by large AI systems.

But silicon photonics is not only a silicon story. The most advanced optical systems often require compound semiconductor materials such as indium phosphide, gallium arsenide, gallium nitride and germanium-based compounds. Indium phosphide is especially important for lasers and high-speed optical devices.

This creates a difficult supply chain problem. AI companies, hyperscalers and chipmakers are racing to scale optical modules, but one of the key substrate materials remains highly concentrated. China is the world’s largest indium producer, accounting for about 70% of global output in 2024.

That concentration became more serious after China introduced export restrictions on indium phosphide in February 2025. Since then, licence delays have created backlogs for companies that manufacture or source InP substrates from China.

AXT, one of the world’s largest indium phosphide substrate producers and a major supplier to Coherent, said export permits were its most significant challenge. The company manufactures most of its InP substrates in China and only received its first permits last June. It still faces a large order backlog.

The effect has spread beyond individual suppliers. Coherent, Lumentum, VPEC and LandMark Optoelectronics all sit inside the optical components ecosystem that depends on reliable substrate supply. When permit delays hit upstream InP material, the impact moves through wafers, chips, optical modules and AI data centre equipment.

Prices show the severity of the shortage. Since China introduced export restrictions, the average price of a 6-inch indium phosphide wafer has surged by 250% to about $5,000. That price increase reflects both physical scarcity and the strategic premium attached to non-disrupted supply.

The supply squeeze also comes at a time of aggressive photonics investment. Nvidia announced $2bn investments each in Coherent and Lumentum in March. Marvell Technology also moved into photonics through its acquisition of Celestial AI, reflecting stronger demand for optical technology in AI computing.

These investments show where the industry is heading. AI infrastructure needs optical interconnects to manage power, latency and bandwidth. But China’s indium phosphide controls mean that materials availability could become a gating factor for deployment.

Companies are trying to respond. Coherent plans to double its InP wafer capacity at its Texas plant this year and more than double it again by the end of 2027. US photonics firms are also seeking supply from non-Chinese producers such as Sumitomo Electric Industries.

However, capacity additions are slow. New substrate plants can take two to three years to bring online. Qualification cycles are also long because optical chipmakers cannot easily switch substrate suppliers without testing performance, reliability and consistency.

This makes the shortage difficult to solve quickly. Even if new capacity is announced, it may not arrive fast enough to meet near-term AI data centre demand. Meanwhile, many non-China producers already consume part of their own output internally, reducing the amount available to the broader market.

China’s Materials Chokepoint Strategy Strengthens Domestic Producers

China’s indium phosphide export controls are creating both pressure and opportunity. They restrict global supply, but they also support domestic Chinese substrate producers that are expanding capacity.

Yunnan Germanium, Guangdong Xiandao and Zhuhai Dingtai Xinyuan are among China’s leading domestic InP substrate players. Their role is becoming more important as Beijing uses materials controls to strengthen strategic leverage across semiconductor and AI supply chains.

Yunnan Germanium has already moved to expand. The company announced a 189mn yuan investment in April to raise production capacity to 450,000 single InP wafers annually. Its shipments of InP wafers rose by 74% in 2025, showing fast domestic market growth.

Guangdong Xiandao is also expanding through its subsidiary Guangdong Xianrui. The project is expected to produce 40 t/yr of indium phosphide crystals, which are used as raw material for substrates.

These investments fit a broader pattern. China is not only defending control over upstream critical materials. It is also building downstream processing capacity in higher-value compound semiconductor materials.

However, Chinese producers may not immediately solve the global shortage. Some are still seeking export approvals, and any overseas shipments may be limited. Domestic demand remains a priority, especially as China builds its own AI, optical communications and semiconductor ecosystem.

AXT

Supplier qualification creates another barrier. Companies such as Coherent and Lumentum are unlikely to switch easily from established suppliers. Coherent relies heavily on AXT, while Lumentum sources mainly from Sumitomo and JX Advanced Metals. New suppliers must pass demanding qualification cycles before they can enter critical optical chip supply chains.

This gives China’s export controls a long-lasting effect. Even if alternative suppliers exist, the market cannot instantly redirect demand. The bottleneck is not only production volume. It is qualified, high-quality, customer-approved substrate supply.

The strategic lesson is clear. AI supply chains are not only exposed to advanced chips, GPUs and packaging capacity. They also depend on a deep materials stack that includes indium, phosphorous chemistry, InP crystals, substrates, wafers, lasers, detectors and optical modules.

This is why indium phosphide exports have become so important. AI data centre buildouts need more optical links as clusters grow larger. Copper interconnects face limits in speed, distance and energy consumption. Photonics offers a solution, but only if the materials chain can scale.

For the US and its allies, the response will likely require more than emergency licence negotiations. It will require investment in indium recovery, InP crystal growth, substrate manufacturing, wafer capacity and long-term offtake agreements. It may also require strategic stockpiles for high-purity indium and compound semiconductor substrates.

The issue also strengthens the case for recycling and secondary recovery. Indium is often produced as a by-product, making primary supply difficult to expand quickly. Recovering indium from industrial scrap, displays, semiconductors and related waste streams could become more important if export controls persist.

For AI data centre developers, the risk is timing. Demand for optical modules is accelerating now, while new ex-China capacity may not fully arrive until 2027 or later. That mismatch could raise costs, delay deployments and intensify competition for qualified photonics suppliers.

The market may therefore see a split. Companies with secured InP supply will be better positioned to support hyperscaler demand. Companies exposed to licence delays, qualification bottlenecks or spot-market wafers may face higher costs and delivery risk.

The Metalnomist Commentary

China’s control over indium phosphide exports shows that the AI race is becoming a materials race. The next bottleneck may not be only GPUs or power supply, but the compound semiconductor substrates needed to move data fast enough inside AI clusters.

China’s TiO2 Capacity Utilization Set to Fall in 2025 Amid Sluggish Demand and Export Pressures

China's Titanium Dioxide

China, the world's leading producer of titanium dioxide (TiO2), is set to experience a fall in capacity utilization rates by 2025. This decline is attributed to an expected rise in production capacity, muted demand from downstream sectors, and mounting export pressure. According to market estimates, China’s TiO2 capacity utilization is projected to decrease by 2 percentage points, reaching 68% in 2025 from 2024’s 70%.

Capacity Expansions and Production Growth

In 2024, China will continue its expansion of TiO2 production capacity with several new facilities coming online. Companies like Pangang, Inner Mongolia Guocheng, Fujian Kuncai, and Guangdong Huiyun are set to add a combined 700,000 tons per year (t/yr) of new capacity. This expansion will increase the total production capacity from 5.87 million t/yr in 2023 to 6.57 million t/yr by the end of 2024.

In 2025, further expansions will continue. Shandong Jinhai, Sichuan Yibin Tianyuan, and Shandong Xianghai Titanium Resources Technology are among the companies investing in additional capacity. These new projects will add at least 360,000 t/yr of TiO2 capacity, bringing China's dominance in the global market even higher. Despite these investments, the rising supply could outpace domestic demand.

Muted Domestic Demand

The domestic demand for TiO2, particularly from the painting industry—China's largest consumer of TiO2—has been weakening in recent years. The painting sector accounts for approximately 60% of China's TiO2 consumption, with architectural coatings being the largest segment. However, the slowdown in China’s real estate industry, which directly affects the demand for architectural coatings, is contributing to a reduction in TiO2 consumption.

China’s real estate sector has faced substantial challenges since 2022, with significant declines in investment and completed residential areas. As a result, TiO2 demand from this sector is expected to remain sluggish, further pressuring the TiO2 market in the coming years.

Export Pressure and Trade Restrictions

China’s TiO2 exports have been increasing, with a marked rise in 2023, which accounted for 39.5% of the country’s total production. However, this surge in exports has led to anti-dumping investigations in multiple regions, including the European Union, India, Brazil, and Saudi Arabia. The European Union, in particular, has imposed final anti-dumping duties on Chinese TiO2 imports, which will take effect from January 2025.

These trade restrictions could impact the international demand for Chinese TiO2, as countries with ongoing anti-dumping measures are likely to see a reduction in TiO2 imports from China. Meanwhile, competitors in other countries, such as Tronox, are recovering from low utilization rates and are expected to increase their production, potentially reducing China’s share in the global TiO2 market.

Outlook for 2025 and Beyond

The overall outlook for China’s TiO2 market in 2025 is uncertain. While capacity expansions will continue, weak domestic demand and export restrictions will likely make it challenging for the country to sustain the high output levels seen in previous years. Market participants predict that the growth in output will slow down, and capacity utilization rates will continue to decline as China faces both domestic and international pressures.

As China grapples with a combination of weaker demand and export constraints, it is expected that the TiO2 industry will have to adjust to a new normal of reduced growth in 2025.

Japan tungsten recycling expansion accelerates after China export controls

the International Tungsten Industry Association(ITIA)

Japan tungsten recycling expansion is now central to the country’s response to China’s new export controls. Japan has no domestic tungsten mines and historically relied on Chinese APT and cemented carbide imports. As a result, Japan tungsten recycling expansion is becoming the primary lever to secure supply and stabilise its hard-metal value chain. Japan tungsten recycling expansion also reflects a broader shift toward circularity and strategic raw material resilience.

Scrap flows highlight the scale of Japan tungsten recycling expansion

Japan is ramping tungsten scrap utilisation to compensate for lower Chinese export volumes. The country generates 3,500–4,000t of tungsten scrap annually, with about half recycled domestically and half exported. However, Japan also imports 500–1,000t of scrap each year, underscoring its dependence on global recycling networks.

China’s export controls on APT and cemented carbide have sharply reduced shipments into Japan. No other producing country has fully offset this loss, creating a structural shortfall in virgin tungsten materials. Therefore, Japanese industry is pushing harder to capture and process scrap from cutting tools and hard-metal components.

Scrap exports to overseas processors have also surged as part of this adjustment. From April to June, Japan exported 865t of tungsten scrap, double the previous quarter. Much of this material goes to the US, Germany and Taiwan for conversion into tungsten carbide powder. Meanwhile, limited domestic processing capacity means Japan must then reimport refined powders or finished tools.

Japan lacks tungsten recycling capacity comparable to leading manufacturing countries such as Germany. Market participants agree that higher prices and strong scrap demand create a window to invest in domestic plants. Companies like Mitsubishi Materials and Sumitomo Group are intensifying recycling efforts, but significant capacity additions will take time to materialise.

Strategic impact of Japan tungsten recycling expansion on supply security

Japan tungsten recycling expansion carries important strategic implications beyond near-term supply balancing. By strengthening domestic scrap processing, Japan can reduce exposure to Chinese export policies over the medium term. At the same time, enhanced recycling supports national goals on circular economy and lower carbon metal supply.

Industry leaders emphasise that Japan still needs a framework for constructive cooperation with China. However, they also stress that recycling will play a growing role in any long-term procurement strategy. As a result, Japan tungsten recycling expansion is viewed as both a defensive and forward-looking move. It protects critical industries today while aligning with future ESG requirements.

Higher tungsten prices and constrained primary supply should continue to incentivise investment in collection, sorting and processing infrastructure. Tool manufacturers and end-users will likely see tighter take-back schemes and more advanced recycling logistics. In five to ten years, today’s disruption may be remembered as the catalyst that forced Japan to build a more robust, diversified tungsten procurement system.

The Metalnomist Commentary

Japan’s response to China’s tungsten export controls shows how quickly advanced manufacturing economies can pivot toward recycling when supply shocks hit. If current investment momentum holds, Japan could evolve from a largely import-dependent buyer into a more balanced scrap-and-powder hub. Market participants should watch where new recycling plants are sited and how quickly domestic processing capacity closes the gap with Germany and other leaders.

China Rare Earth Export Controls Tighten Global Tech Flows

China Rare Earth

China rare earth export controls just tightened across mining, processing, magnets, and recycling. The China rare earth export controls require prior approval for technology transfers and technical services. As a result, the China rare earth export controls reshape risks for EVs, wind turbines, and defense supply chains.

What the rules cover

Beijing now restricts technology for mining, smelting and separation, and metal smelting. The rules also cover magnetic material manufacturing and secondary rare earth recycling. Authorities named samarium-cobalt, neodymium-iron-boron, and cerium magnet technologies. The measures include assembly, commissioning, maintenance, and upgrade services. Chinese entities also need approval before assisting foreign rare earth activities. Violations face penalties under the new regime.

Global impacts and industry response

The policy targets unauthorized tech transfer and national security risks. China previously limited exports of several medium and heavy rare earths. The latest move extends controls to know-how and services. Market participants expect stricter IP protection and slower overseas projects. Meanwhile, the US and allies keep building non-China supply chains. However, technology remains the key bottleneck outside China. China holds major reserves and advanced processing capabilities. That gap will challenge rapid diversification efforts.

China rare earth export controls may raise compliance costs for JVs. They could delay new NdFeB magnet lines outside China. Companies will likely pivot toward recycling and substitution. As a result, buyers may sign longer contracts with diversified suppliers. Governments may expand funding for separation and metals plants. Price volatility could rise if inventories tighten into 2026.

The Metalnomist Commentary

China just shifted leverage from material tons to proprietary process IP. Expect accelerated Western investments in separation, metalmaking, and magnet plants, plus stricter trade compliance. Winners will pair secure ore with in-house processing know-how and robust recycling.

Zircon Sand Export Prices Rise as China Faces Lower Import Supply

Zircon Sand

Zircon sand export prices to China increased for second-quarter deliveries as major overseas mining firms responded to tighter supply, higher freight costs, and a stronger yuan against the US dollar. The move pushed Chinese buyers into a firmer import market after a weaker start to the year.

Zircon sand export prices rose as Australian heavy minerals producer Iluka Resources lifted its quarterly price for 66% zircon sand to $1,680-1,750/t cif China. That compared with $1,560-1,630/t cif China in the first quarter.

Zircon sand export prices also increased from Tronox. The US-based titanium dioxide and zircon producer raised its Australian-origin 66% zircon sand price by $100/t to $1,725-1,750/t cif China and lifted South African-origin material by the same amount to $1,710-1,730/t cif China.

Overseas Supply Cuts Tighten China’s Zircon Import Market

Lower supply has become the main support for higher zircon sand offers. Iluka said earlier this year that it plans to reduce 2026 output of zircon sand, zircon in concentrate, and synthetic rutile.

China’s import data also showed weaker availability. The country imported 120,604t of zircon sand and concentrates in February, down 12% from a year earlier and 45% from January.

South Africa, Nigeria, and Australia were China’s top three suppliers in February, shipping 44,753t, 21,062t, and 18,839t, respectively. Over January-February, China imported 342,177t of zircon sand and concentrate, down 25% from a year earlier.

Domestic Beneficiation Producers Raise Offers

Higher second-quarter export prices quickly fed into China’s domestic zircon market. Domestic 65% zircon sand prices rose to Yn9,400-9,600/t ex-works on 7 April, excluding 13% VAT, from Yn9,300-9,500/t on 31 March.

Zirconium-titanium beneficiation producers raised offers in response to higher overseas mining company prices. This shows how imported mineral sands pricing can quickly influence domestic processing margins and downstream cost expectations.

The price increase matters for ceramics, refractory materials, zirconium chemicals, foundry applications, and titanium-zirconium mineral processing chains. If import supply stays tight, Chinese buyers may face continued cost pressure through the second quarter.

The Metalnomist Commentary

The zircon market is showing a classic supply-led price recovery. China’s downstream demand may not be surging, but reduced overseas supply, freight costs, and firmer producer offers are enough to lift import and domestic prices.

China Rare Earth Export Restrictions Disrupt Global Supply and Spur Price Volatility

China Rare Earth

Tightening China rare earth export restrictions are reshaping global supply chains as Chinese exporters suspend offers and overseas buyers scramble to secure inventory. The new regulations, imposed in early April, target seven medium and heavy rare earth elements critical to advanced electronics and defense systems.

Export Uncertainty Freezes Market Activity

China's customs agency is conducting a 45-day investigation into the export of dysprosium, terbium, gadolinium, lutetium, samarium, and yttrium. As a result, many Chinese suppliers have halted offers entirely, citing uncertainty around permit approvals. While some export offers were made at a 20–30% premium over domestic prices, most exporters chose to prioritize long-term relationships rather than exploit short-term price spikes.

This uncertainty has triggered a rush by overseas buyers to secure rare earth materials from non-China inventories. However, spot market activity remains subdued due to elevated pricing and unclear timelines on permit outcomes.

South Korea Ramps Up Imports Amid U.S. Tensions

South Korean firms—including Samsung, LG, and Hynix—have been warned against re-exporting rare earth-containing products to U.S. military end-users. This has raised concerns of even stricter oversight by Beijing, particularly around transshipments that may indirectly support U.S. defense supply chains.

Despite the warnings, South Korea has dramatically increased its rare earth imports from China. In Q1 2025, dysprosium oxide imports reached 17 tonnes, up from just 1.2 tonnes a year earlier, making South Korea the top importer. Terbium oxide imports also climbed to 2.8 tonnes, positioning the country as China's second-largest buyer after Japan.

Strategic Stockpiling Reflects Long-Term Risk

The surge in South Korean purchases appears to exceed immediate demand, suggesting a strategic stockpiling effort ahead of further supply restrictions. Meanwhile, overseas suppliers with inventory outside China are raising prices to capitalize on the constrained supply environment.

In 2024, China exported 150 tonnes of dysprosium oxide and 91 tonnes of terbium oxide globally, with Japan and South Korea accounting for the majority. The shifting trade flows underscore the geopolitical sensitivity of the rare earth market and the risks posed by regulatory fragmentation.

The Metalnomist Commentary

The China rare earth export restrictions are a strategic inflection point for global rare earth supply chains. While buyers scramble to manage short-term disruptions, the long-term signal is clear: diversification, transparency, and geopolitical alignment are now essential in securing access to critical minerals.

Europe Yttrium Oxide Prices Surge on China Export Controls

Yttrium Oxide

Europe yttrium oxide prices have surged as export controls from China choke heavy rare earth supply and tighten available spot units. Europe yttrium oxide prices jumped again this week, with buyers forced to pay sharply higher levels for scarce cargoes into the Atlantic market. However, prices for other rare earth products in Europe moved only slightly, reflecting more balanced conditions in the neodymium and praseodymium complex. Europe yttrium oxide prices now highlight how vulnerable regional supply chains remain to policy shifts in China’s rare earth sector.

Yttrium Shortage Exposes Heavy Rare Earth Risk

The latest rally in Europe yttrium oxide prices stems from an acute supply shortage outside China as export licences remain constrained. Assessments for 99.999pc yttrium oxide rose sharply to $150-200/kg cif Europe, up strongly from last week’s range. Some market participants report even higher Europe yttrium oxide prices above $200/kg in isolated critical-need spot deals, although volumes are limited. However, overall spot liquidity is thin as many enquiries for yttrium oxide and yttrium metal go unfilled because suppliers cannot secure material. Traders continue to struggle with Chinese export licences for restricted heavy rare earth products, with applications facing close scrutiny and long delays. In the absence of fresh stock, European buyers must rely on existing inventories, making a near-term correction in yttrium prices unlikely. Other heavy rare earths, including dysprosium and terbium oxides, remain price-stable but still trade at elevated levels by historical standards.

Light and Heavy Rare Earths Diverge Across Europe

Light rare earths tell a different story, with sentiment turning slightly more bearish in China on supply and demand shifts. Neodymium and praseodymium prices softened as Chinese magnet plants slowed restocking and ore availability increased under the second 2025 mining quota. This weaker tone has filtered into Europe, trimming delivered prices for certain neodymium and praseodymium oxide and metal products. Even so, spreads between oxide and metal remain steady, reflecting solid but not overheated demand from key magnet applications. Erbium oxide prices in Europe held steady but sit well above equivalent Chinese levels amid ongoing export and customs frictions. Fresh erbium shipments continue to face port delays in China as authorities check impurities and trace restricted heavy rare earths. These checks add friction to international trade flows and reinforce the premium that European buyers must pay for secure supply. As a result, buyers and traders are reassessing sourcing strategies, inventory policies and long-term contracts to manage future rare earth disruptions.

The Metalnomist Commentary

Europe’s yttrium spike is a textbook example of how targeted export controls can weaponise narrow heavy rare earth supply chains. For end-users, the lesson is clear: diversify heavy rare earth sourcing, lock in strategic contracts and build working inventories before the next policy shock. For project developers, today’s prices strengthen the case for non-Chinese heavy rare earth capacity, but investors will demand durable policy visibility and long-term demand signals.

China Titanium Sponge Exports Rise in March as Asian Buyers Support Demand

China Titanium Sponge

China titanium sponge exports rose year on year in March, supported by stronger buying interest from South Korea, India, Vietnam and Slovenia. Chinese customs data showed exports reached 453t during the month, up 8.6% from 417t a year earlier.

China titanium sponge exports still declined by 7.4% from February’s 489t, showing that overseas buying remained selective. Some buyers were not under immediate pressure to purchase Chinese material because spot supply was sufficient.

China titanium sponge exports totalled 1,535t in January-March, down 5.7% from a year earlier. The decline reflected weaker buying from major consumers including Japan, South Korea and the US.

The data show a titanium sponge export market that is recovering unevenly. Asian demand helped March shipments, but inventory drawdowns, delayed purchasing and weaker aerospace-linked orders continued to limit broader export momentum.

Japan, South Korea and US Demand Weaken in First Quarter

Japan remained the largest destination for Chinese titanium sponge in January-March, receiving 347t. However, shipments fell by 37% from 548t a year earlier.

The decline was mainly caused by delayed purchasing from a major Japanese consumer. Purchases are expected to resume in May, which could support later-quarter export flows.

South Korean imports from China also fell. Shipments dropped by 33% to 172t as some buyers slowed procurement after failing to secure downstream aerospace original equipment manufacturer orders.

This matters because aerospace demand remains one of the most important drivers of higher-grade titanium sponge consumption. When downstream aerospace orders are delayed, sponge buyers often reduce spot intake and work through inventories.

US demand was almost absent in the first quarter. China exported only 0.2t of titanium sponge to the US, down 99.8% from a year earlier, as US consumers continued drawing down inventories.

The US result highlights the effect of inventory cycles and trade uncertainty. Even when Chinese material remains available, buyers may delay purchases if they have sufficient stock or face qualification, tariff and policy risk.

Export Prices Track Higher Domestic Sponge Market

Chinese 99.7% grade titanium sponge export prices averaged $6.70/kg fob China in January-March. This was up 1.5% from $6.60/kg a year earlier.

The increase tracked higher domestic titanium sponge prices. Export pricing therefore reflected cost support in China rather than a broad surge in overseas demand.

The modest price rise also shows that the market remains balanced. Chinese suppliers have support from domestic costs, but overseas buyers are still cautious and selective.

For global titanium supply chains, the key issue is not only volume. The quality, qualification status and end-use requirements of sponge matter, especially for aerospace and high-performance industrial applications.

China’s titanium sponge exports remain important for regional buyers in Asia and Europe. However, demand from aerospace-linked customers will depend on downstream order visibility, inventory levels and qualification confidence.

If Japanese buying resumes in May and South Korean aerospace-related demand improves, Chinese exports could recover further. But weak US flows suggest that trade and inventory factors will continue to limit upside in some markets.

The Metalnomist Commentary

China titanium sponge exports show a market supported by regional buying but still constrained by aerospace order timing and inventory drawdowns. The next signal will come from whether Japanese and South Korean buyers return with stronger qualified-material demand in the second quarter.

China’s policies are reshaping the global tungsten market

International Tungsten Industry Association

China’s tightening controls are fundamentally reshaping the global tungsten market and forcing buyers to rethink supply strategies. The global tungsten market now faces record prices, acute shortages outside China and rising geopolitical risk. As a result, investors and consumers across the global tungsten market are reassessing where to source and where to deploy capital.

China’s export controls on ammonium paratungstate (APT) and tungsten trioxide have sharply reduced export availability. At the same time, China’s surging appetite for tungsten concentrates has deepened shortages in Europe and other consuming regions. Therefore, tungsten prices have climbed to record levels in both APT and concentrate markets.

Meanwhile, import data show that China has become an aggressive buyer of concentrates, with first-half 2025 imports up 75pc year on year. This shift has pushed European and Japanese buyers to pursue alternative strategies, including buying concentrates instead of APT and intensifying recycling and non-Chinese partnerships.

Supply shock exposes vulnerabilities in the global tungsten market

China accounts for roughly 80pc of global APT supply and is now exporting far less material. Since Beijing expanded its export licence regime in February, APT exports dropped by 42pc in January-June 2025 versus a year earlier. Similarly, exports of tungsten trioxide fell by 76pc, leaving European consumers scrambling for units.

As a result, European APT prices have surged to fresh highs of $580–645/mtu duty unpaid Rotterdam. This represents a roughly 20pc increase since the start of the year and a jump from $550–600/mtu only days earlier. European tungsten concentrate prices have followed, rising to $500–520/dmtu in-warehouse Rotterdam, up nearly 30pc year on year.

Consequently, downstream consumers and midstream processors are re-engineering their sourcing models. Buyers are shifting from APT to concentrates where possible and are strengthening ties with alternative suppliers such as Vietnam. Meanwhile, Japanese buyers are boosting recycling rates and deepening co-operation with smelters in Germany and the US to reduce exposure to China.

However, traders find themselves squeezed as limited material flows directly to end users. Many trading houses are sidelined in spot activity and instead look to position themselves with long-term strategies and optionality. This structural shift underlines how fragile and concentrated current tungsten supply chains remain.

Uncertain outlook complicates investment in non-Chinese tungsten projects

On paper, today’s high prices and tightness strongly support new western tungsten projects. Yet equity and debt investors remain wary about whether current conditions in the global tungsten market are durable. Many tungsten mining projects are years from production, and investors fear that a shift in Chinese policy could quickly loosen fundamentals.

Geopolitics further clouds the investment case. The evolving US-China trade conflict and Europe’s position “in the middle” both influence tungsten flows but do not offer clear long-term signals. The US is accelerating efforts to secure domestic supply and support new mines, while Europe is also expected to attract investment as it seeks strategic autonomy. Still, long-term policy direction remains uncertain.

At the same time, Chinese producers stress that tightness reflects genuine domestic demand, not a short-term export tactic. China’s industrial strategy has moved from low-cost manufacturing toward high-value sectors such as photovoltaics. Forecasts suggest tungsten-wire demand from the PV sector could grow 40–50pc annually over the next five years, requiring around 8,000t of tungsten by 2027.

Therefore, it appears unlikely that China will import large volumes of concentrates only to flood European markets later. While China clearly has the ability to do so, conference participants see that scenario as implausible given the strength of its internal consumption. For now, the base case is high but stabilising prices, with the next few months likely to shape long-term procurement and investment decisions.

The Metalnomist Commentary

China’s gradual pivot from “world’s tungsten factory” to voracious downstream consumer is forcing a structural repricing of risk. For miners and financiers outside China, the challenge is to move before the window closes, yet not overbuild into a market still governed by Beijing’s policy choices. Buyers who secure diversified, traceable tungsten supply now may find that this period of pain ultimately buys them strategic resilience.

Australia's Export Revenues from Iron Ore and Metallurgical Coal Projected to Decline in FY2025

Australia's export revenues from iron ore and metallurgical coal are forecasted to decline significantly in FY2025 due to a general decrease in international prices, despite increased port inventories in China and rising demand from emerging markets.

The Australian Department of Industry, Science, and Resources recently released its "Q3 2024 Resources and Energy Report," predicting that export prices for iron ore will fall to $96 per ton in 2024, $84 per ton in 2025, and $77 per ton in 2026.

For the fiscal year 2025 (April 2024 - March 2025), Australia's iron ore export revenues are expected to drop by 17.4% from AUD 138 billion in the previous year to AUD 114 billion. Further decline is anticipated in FY2026 (April 2025 - March 2026) with revenues projected to be AUD 102 billion.

Earlier reports had estimated FY2025 iron ore export revenues to be AUD 107 billion. However, improved economic indicators from China, Australia's largest export market, have led to increased port inventories and improved market sentiment, prompting a revision of the forecasts.

Nonetheless, recent price declines pose challenges. Iron ore prices fell by $7-10 per ton in June compared to the previous month. As of June 28, iron ore on China's Dalian Commodity Exchange was 819 yuan per ton ($112.7 per ton), while on the Singapore Exchange it was $105.65 per ton.

The price drop is attributed to weakening steel demand in China during the off-season and increased port inventories. The most significant negative factor in the international iron ore market is the excess supply of iron ore not absorbed by China's existing demand.

Contrary to the Australian government's projections, HSBC Holdings, a British multinational commercial bank, anticipates that international iron ore prices will reach $100 per ton in 2024. The bank believes that strong demand from emerging markets will prevent a significant price drop despite China's real estate crisis.

Capital Economics, a British economic research firm, predicts that iron ore prices will fluctuate between $99 and $100 per ton this year. The firm forecasts prices at $100 per ton in Q2 and Q4, and $99 per ton in Q3, with a drop to $85 per ton by the end of next year. The firm attributes the expected decline to prolonged recessions in major economies and weak global steel demand.

For FY2025, metallurgical coal export revenues are projected to fall by 31.1% from AUD 61 billion in the previous year to AUD 42 billion.

While Australia's production of metallurgical coal is expected to increase during this period, the decline in export prices will likely reduce export revenues. Metallurgical coal export prices are anticipated to drop from $264 per ton in 2024 to $228 per ton in 2025, and further to $208 per ton in 2026.

The Australian government and mining industry forecast that reduced demand from China, the largest importer, along with adverse weather conditions such as La Niña, could negatively impact production. However, they do not foresee the price decline triggering a crisis for Australian mining companies.

Minor Metals Security Premium Becomes Cost of Supply Chain Resilience

Minor Metals

Minor metals security premium is becoming a structural cost for western buyers as China’s dominance in processing leaves supply chains exposed to disruption. Speakers at the FT Commodities Global Summit in Lausanne said consumers must pay more for non-Chinese minor metals if they want resilient supply.

The argument is no longer theoretical. Chinese export controls have reduced available supply in western markets and widened the price gap between China and Europe. Materials that once traded closely across regions now reflect very different fundamentals.

Minor metals security premium is most visible in dual-use products subject to Chinese export controls. European gallium prices are more than double Chinese export levels, while Rotterdam germanium prices are also close to twice Chinese fob values.

This premium is not only a temporary reaction to trade disruption. Speakers argued that higher western prices must persist even if export controls are eased, because alternative processing capacity outside China needs long-term economic support.

China Export Controls Break Traditional Price Links

China’s concentration in minor metals processing has created a major vulnerability for western manufacturers. Many critical materials are produced as by-products, refined in small volumes and traded through narrow supply chains.

That structure makes the market highly sensitive to policy changes. When China restricts exports, buyers in Europe and the US cannot easily replace supply because there are few alternative processors with qualified material.

The result is a geographic price split. European warehouse prices once tracked Chinese markets closely, but that relationship no longer reflects real availability outside China. Chinese prices now represent domestic conditions, while western prices reflect scarcity, logistics risk and origin security.

Gallium and germanium show this most clearly. Both metals are essential for semiconductors, optics, power electronics, defence systems, satellite communications and advanced manufacturing. Both are also heavily exposed to Chinese processing and export licensing.

For western buyers, the question is no longer whether Chinese prices look cheaper. The real question is whether material can be accessed, shipped, qualified and used without exposing factories to sudden supply interruptions.

That changes procurement behaviour. Buyers are increasingly willing to pay a security premium for material with reliable origin, clearer documentation and lower exposure to export restrictions.

The same logic is spreading to other by-product metals. Indium, bismuth and antimony are gaining strategic attention because they support electronics, flame retardants, solders, alloys, photovoltaics, semiconductors and defence-related applications.

These metals are often small in volume but large in industrial consequence. A missing input can stop production even if the dollar value of the metal is tiny compared with the final product.

This is why western buyers are treating minor metals differently from ordinary commodities. They are paying for continuity, not only material.

Supply Security Needs Processing Capacity and Long-Term Demand

Minor metals security premium must support investment, not only emergency buying. If higher prices disappear as soon as immediate disruption fades, new processing projects outside China will struggle to survive.

This is the key industrial challenge. Building non-Chinese supply requires refining capacity, technical know-how, environmental permitting, qualified output and customer commitments. These cannot be created quickly during a crisis.

A short-term price spike can help existing suppliers, but it does not guarantee new capacity. Investors need confidence that buyers will continue paying for secure supply after the market stabilises.

This is where security premiums differ from green premiums. Green premiums have often been debated because buyers could delay paying more for lower-carbon materials. But critical materials supply disruption leaves fewer choices.

If rare earths, gallium, germanium or antimony are unavailable, manufacturers may face production stoppages. In that situation, the premium becomes part of operating cost rather than a voluntary sustainability expense.

Governments can help bridge this gap through stockpiles, offtake support, price floors, procurement rules and financing tools. But industry also needs to accept that resilient supply chains cost more than the lowest-price global model.

For miners, by-product metals can improve project economics. Recovering indium, bismuth, antimony, gallium or germanium can add revenue streams to larger operations and strengthen the business case for complex ore bodies.

For refiners, sustained premiums can justify investment in separation and purification capacity. For manufacturers, long-term contracts can reduce the risk of sudden shortages and forced spot-market buying.

The larger strategic point is clear. Western supply chains cannot become more secure while continuing to benchmark only against Chinese domestic prices. Security, traceability and supply reliability require a different pricing model.

Minor metals security premium therefore represents a shift in how critical materials are valued. Buyers are beginning to price the risk of disruption, not just the cost of production.

The Metalnomist Commentary

The security premium for minor metals is the market’s way of pricing geopolitical risk into industrial supply. Western buyers cannot build resilient supply chains while demanding Chinese-cost material from non-Chinese sources.