DMEGC Magnet Output Falls as Competition and Export Controls Pressure Sales

DMEGC

DMEGC magnet output fell in 2025 as tougher competition and China’s export restrictions on some rare earth permanent magnets weighed on sales. Hengdian Group DMEGC Magnetics produced 221,690t of magnetic materials during the year, down 2.5% from 2024.

DMEGC magnet output declined even as the broader Chinese magnet market benefited from stronger demand in new energy vehicles, smart appliances, data centres and consumer electronics. The company’s magnetic material sales fell by 5.9% to 218,282t, while inventories rose by 22% to 19,074t.

DMEGC magnet output weakness shows that rising end-market demand does not guarantee growth for every producer. Fiercer competition in China and overseas, combined with tighter controls on medium and heavy rare earth magnet exports, created pressure across the company’s magnet business.

China imposed export restrictions in April 2025 on permanent magnets containing seven medium and heavy rare earth elements. These included dysprosium, terbium, yttrium, lutetium, gadolinium, scandium and samarium.

The restrictions affected a sensitive part of the magnet supply chain. Dysprosium and terbium are especially important for high-performance magnets used in electric vehicles, wind turbines, robotics, aerospace systems and defence-related applications.

Magnetic Materials Lag as DMEGC Revenue Rises Elsewhere

DMEGC’s overall business still expanded in 2025 despite weaker magnet volumes. Revenue rose by 22% on the year to 22.6bn yuan, while profit increased by 1.3% to 1.85bn yuan.

The strongest revenue growth came from photovoltaic products. Sales from that segment rose by 29% to 14.3bn yuan, making solar products a major earnings driver for the group.

Revenue from magnetic materials increased by 5% to 4bn yuan, even though output and sales volumes declined. This suggests that pricing, product mix or higher-value material sales partly offset weaker physical shipments.

Lithium battery revenue also increased. Sales rose by 12% to 2.72bn yuan, while component sales climbed by 30% to 995mn yuan.

The result shows DMEGC’s advantage as a diversified materials and energy technology supplier. Weakness in one product line did not prevent group revenue growth, because photovoltaics, batteries and components supported the wider business.

Still, the magnet segment remains strategically important. DMEGC had designed magnetic materials capacity of 300,000 t/yr by the end of 2025, placing it among China’s leading magnetic material producers by sales scale.

The company’s battery and component capacity also reached 23GW and 21GW, respectively, while lithium battery output capacity stood at 8GWh. This gives DMEGC exposure to several electrification markets, including solar, batteries, motors and electronic components.

The inventory increase in magnetic materials deserves attention. Rising inventories during a year of falling sales can signal slower customer offtake, tougher competition or weaker export channels.

Export restrictions may have added to that pressure. When overseas buyers face licensing uncertainty, shipment delays or compliance risk, purchasing patterns can change even if underlying demand remains strong.

This is particularly important for rare earth permanent magnets. Buyers in automotive, robotics, wind power and electronics supply chains require stable delivery, traceability and qualification. Policy disruption can therefore affect procurement decisions quickly.

NEVs, Appliances and Data Centres Support Long-Term Magnet Demand

China’s magnet demand outlook remains positive despite DMEGC’s weaker 2025 volume performance. China produced 1.62mn t of magnetic materials in 2025, accounting for about 80% of global output.

This total included 750,000t of permanent magnetic ferrite, 600,000t of soft magnets and 270,000t of rare earth permanent magnets. The scale confirms China’s dominant role across both low-cost and high-performance magnet supply chains.

New energy vehicles remain one of the strongest demand drivers. China’s automobile output rose by 10% to 34.5mn units in 2025, while NEV production increased by 29% to 16.6mn units.

NEVs consume more magnetic materials because electric drivetrains, sensors, power steering, braking systems, pumps and comfort systems all require motors and magnetic components. As vehicles become more automated, intelligent and comfort-oriented, magnet intensity per vehicle is likely to increase.

Smart home appliances are another major demand source. China’s output of air conditioners, refrigerators and washing machines reached 266.97mn, 109.24mn and 125.17mn units, respectively, in 2025.

These appliances support demand for soft magnets and ferrite materials used in motors, compressors, power electronics and control systems. Energy efficiency standards and inverter technologies can further raise the need for higher-performance magnetic components.

Data centres are becoming a newer growth channel. Global server shipments rose by 1.9% to 16.3mn units in 2025, while AI server shipments increased by 25% to 2.04mn units.

Cooling systems in data centres require fans, motors and magnetic components. As AI infrastructure expands, heat management becomes more important, adding another source of demand for rare earth permanent magnets and soft magnetic materials.

Consumer electronics also supported the market. Global smartphone shipments rose by 2% to 1.25bn units, while personal computer shipments increased by 9.2% to 280mn units.

This broad demand base gives Chinese magnet producers a strong long-term market. However, it also attracts capacity expansion and intensifies competition. Producers must now compete not only on volume, but also on product quality, export compliance, heavy rare earth efficiency and downstream qualification.

The market is therefore entering a more selective phase. Producers with strong customer relationships, stable rare earth supply, advanced magnet technologies and diversified end-market exposure will be better positioned.

DMEGC’s 2025 results reflect that transition. Demand for magnets is rising, but policy controls, competition and inventory pressure can still weaken individual company performance.

The Metalnomist Commentary

DMEGC’s results show that China’s magnet market is growing, but not evenly. The next competitive divide will come from export-control management, high-performance magnet capability and access to reliable rare earth feedstock.

Ningbo Yunsheng NdFeB Magnet Output Rises on NEV and AI Terminal Demand

Ningbo Yunsheng

Ningbo Yunsheng NdFeB magnet output increased in 2025 as demand from new energy vehicles, consumer electronics, industrial motors and robots supported China’s rare earth permanent magnet sector. The company produced 14,856t of finished neodymium-iron-boron magnets during the year, up 11% from 2024.

Ningbo Yunsheng NdFeB magnet output growth was matched by stronger sales. The company sold 14,197t of finished NdFeB magnets in 2025, up 10% from a year earlier, while inventories rose by 47% to 2,055t.

The inventory increase shows that supply growth remains strong even as downstream demand improves. For China’s magnet industry, the key question is whether expanding production capacity can stay aligned with demand from EVs, AI devices, robots and high-efficiency motors.

NEVs and Consumer Electronics Strengthen Magnet Revenue

Yunsheng’s revenue rose by 6% on the year to 5.46bn yuan, while profit increased sharply to 330.82mn yuan from 95mn yuan in 2024. The improvement reflected stronger demand in its core downstream sectors and higher-value magnetic component sales.

Revenue from NdFeB permanent magnetic materials sold as magnetic components rose by 60% to 705mn yuan. This suggests that Yunsheng is gaining value not only from magnet volume, but also from more advanced component-level products.

The NEV sector remained the company’s largest growth driver. Yunsheng’s sales revenue from new energy vehicle applications rose by 9.6% to 2.55bn yuan in 2025.

China sold 12.8mn NEV passenger cars in 2025, up 18% from a year earlier. NEVs accounted for 54% of total domestic passenger car sales, reinforcing the role of electric drivetrains in magnet demand.

NdFeB magnets are critical for high-efficiency motors used in electric vehicles, power steering systems, industrial automation and robotics. As vehicle electrification deepens, magnet suppliers remain closely tied to demand for neodymium, praseodymium, dysprosium and terbium.

Consumer electronics also supported Yunsheng’s performance. Revenue from the sector rose by 0.8% to 1.3bn yuan, helped by rapid growth in AI terminal product shipments and continued development of generative AI technologies.

Baotou Expansion Adds High-Performance Magnet Capacity

Ningbo Yunsheng NdFeB magnet output is set to receive further support from capacity expansion. The company had 26,000 t/yr of rough NdFeB magnet capacity and 10,000 t/yr of grain boundary diffusion capacity by the end of 2025.

Grain boundary diffusion is strategically important because it improves magnet performance while helping manage the use of heavy rare earths. This matters for high-performance applications where heat resistance, magnetic stability and material efficiency are critical.

Yunsheng is expanding its Baotou site to 15,000 t/yr of high-performance permanent magnetic materials by June 2026. The first 5,000 t/yr phase has been operating since June 2025, and the second 10,000 t/yr phase is expected to come on line in 2026.

Baotou is a strategically important location because it sits close to China’s rare earth resource and processing base. This gives magnet producers logistical and supply-chain advantages in sourcing rare earth materials and scaling downstream manufacturing.

The expansion also highlights China’s continued dominance in the rare earth magnet value chain. As global demand rises from EVs, AI hardware, robotics, industrial motors and clean-energy systems, Chinese producers are still adding capacity faster than most overseas competitors.

The Metalnomist Commentary

Yunsheng’s results show that rare earth magnet demand is broadening from EVs into AI terminals, robotics and high-efficiency motors. The next strategic risk is not only demand growth, but whether rising Chinese magnet capacity creates inventory pressure while tightening demand for high-quality rare earth feedstock.

Increased Supplies and Weak Demand Pressure Chinese Rare Earths

As global supplies continue to rise and demand from downstream industries slows, market participants anticipate short-term downward pressure on Chinese rare earth markets. Consecutive output increases, driven by higher ore feedstock supplies from China’s mining quotas and imports from major supplier countries, coupled with reduced capacity utilization in the magnet industry, have resulted in elevated inventories across many rare earth companies. This has prompted suppliers to destock materials at comparatively lower prices. Pessimism regarding short-term demand outlooks is growing, particularly in light of the global economic downturn.

China's rare earth output has steadily increased over recent years, supported by higher mining quotas and ore feedstock imports. Metalnomist projects that China’s total quotas for rare earth mining products in 2024 will rise by 10-15% compared to the previous year, reaching 280,000-290,000 tons. The production of praseodymium-neodymium oxide from these quotas is expected to reach approximately 44,500-45,500 tons this year, up from around 40,000 tons in 2023.

Imports of ore feedstock from Southeast Asian countries, including Myanmar (Burma), Laos, and Malaysia, are projected to increase by 3-5% in 2024, reaching around 60,000 tons of rare earth oxide (REO), as rising shipments from Laos outweigh declines from Myanmar and Malaysia. Conversely, China’s rare earth metal ore imports from the US are likely to decrease by over 30% from the previous year, falling below 28,000 tons of REO, due to increased domestic consumption in the US. US-based rare earth producer MP Materials more than doubled its praseodymium-neodymium oxide production during April-June and expects a further 50% increase in the third quarter, further reducing its exports to China.

Metalnomist forecasts China’s production of praseodymium-neodymium oxide using ore feedstock imports from Southeast Asia and the US to reach around 20,000-21,000 tons in 2024. Overall, China’s praseodymium-neodymium oxide output is expected to rise to approximately 92,000-95,000 tons this year, representing a 10% increase from 2023.

China's total production of dysprosium oxide in 2024 is expected to increase to around 3,600-3,700 tons, including approximately 400 tons from domestic mining quotas, 2,000 tons from ore feedstock imports, and around 1,000 tons from neodymium-iron-boron (NdFeB) magnet scraps. Terbium oxide production is also projected to rise to around 650 tons, with around 75 tons produced from China’s mining quotas, 390 tons from ore feedstock imports, and 180 tons from NdFeB magnet scraps.

Over the past decade, many magnet plants have reduced their consumption of ferro-dysprosium and terbium metal by more than 70% to cut production costs. Market participants warn that this could lead to a surplus of over 1,000 tons of dysprosium oxide and more than 200 tons of terbium oxide this year, unless China’s State Reserve Bureau intervenes with stockpiling efforts to alleviate inventory pressures on rare earth separation plants.

Expansion Slows Amidst Growing Competition

The average operating rates at most of China’s magnet plants have declined to around 60% over the past two months, driven by falling magnet prices and reduced consumer orders during the traditional off-season. China’s rough NdFeB magnet output reached 270,000-280,000 tons in 2023, an 8% increase from the previous year. Some market participants expect production to rise to around 300,000 tons in 2024, as large-scale magnet plants boost operations to secure more market share and consumer orders. However, medium and small magnet plants have been forced to reduce their operating rates to below 50% or suspend operations entirely due to profitability and cash flow challenges.

Major Chinese magnet manufacturer Jinli Magnet aims to increase its production capacity to 38,000 tons per year for rough NdFeB magnets by the end of 2024, and to 40,000 tons per year for high-performance rare earth permanent magnets and advanced magnetic components by 2025. Currently, the company’s output capacity stands at 23,000 tons per year. Meanwhile, Yantai Zhenghai Magnetic Material plans to reach an output capacity of 36,000 tons per year for permanent magnetic materials by 2026.

A few magnet plants have slowed their output expansions, as fierce price competition in downstream applications, particularly in the new energy vehicle (NEV) industry, has severely squeezed profit margins. "I heard that major Chinese NEV manufacturer BYD was required to use cerium-iron-boron (CeFeB) magnets instead of NdFeB in a bid to reduce its production costs and enhance global competitiveness," a source from a magnet plant revealed.

China's production of CeFeB magnets is forecast to rise to over 100,000 tons this year, up from approximately 70,000 tons in 2023, the source added.

Lynas Noveon rare earth magnet deal boosts US supply security

Lynas

The Lynas Noveon rare earth magnet deal aims to build a resilient US magnet supply chain. The partnership links a major Australian rare earths producer with a US downstream magnet maker at a time of intensifying geopolitical pressure around critical minerals. By structuring the Lynas Noveon rare earth magnet deal around both light and heavy rare earth supply, the companies target segments most exposed to Chinese dominance.

The agreement remains non-binding but already sets a strategic framework for cooperation. It covers rare earth feedstock supply, joint development of production plants and coordinated sales of finished magnets to US end-users. As a result, the Lynas Noveon rare earth magnet deal positions both parties to tap growing demand from electric vehicles, wind turbines, defence platforms and advanced electronics. Crucially, they also plan to work with US policymakers to ensure the emerging supply chain qualifies under national-interest and security frameworks.

US rare earth magnet deal builds on Texas processing investments

Lynas already plays a central role in US rare earth industrial policy. The company is building a Texas facility capable of processing 2,500-3,000 t/yr of heavy rare earths and 5,000 t/yr of light rare earths with US government backing. This plant will provide the upstream foundation needed for the Lynas Noveon rare earth magnet deal, anchoring critical materials processing on US soil rather than in China or Southeast Asia.

Meanwhile, Noveon brings established magnet design and production capabilities, plus direct relationships with US industrial and defence customers. Together, the companies can shorten the distance from mine to magnet, increasing traceability and compliance with US sourcing rules. However, real impact will depend on how quickly the Texas plant ramps up and how fast Noveon can translate material flows into scalable magnet production capacity.

Part of a wider US rare earths and magnet realignment

This agreement comes amid a wave of US-linked rare earth and magnet deals. ReElement Technologies recently partnered with South Korea’s Posco International to develop an integrated rare earth and magnet plant. USA Rare Earth also agreed to acquire UK-based Less Common Metals to support a proposed 5,000 t/yr magnet facility in Oklahoma. These moves, together with the Lynas Noveon rare earth magnet deal, form a multi-node ecosystem designed to reduce US dependence on Chinese rare earth supply chains.

However, building a fully competitive mine-to-magnet value chain in North America will take time. Investment needs remain high, permitting timelines are uncertain, and Chinese producers still enjoy scale advantages and deep customer relationships. As a result, near-term pricing power and market share will likely stay concentrated in Asia, even as Western projects gradually add redundancy and optionality. For end-users, the key benefit in the medium term may be greater diversification rather than immediate cost reductions.

The Metalnomist Commentary

This deal underlines how rare earth strategy is shifting from isolated projects to networked partnerships spanning feedstock, processing and magnets. If Lynas and Noveon can execute on scale and cost, their alliance will become a cornerstone of a genuine US-aligned rare earth industrial base. For now, the real test lies in synchronising project delivery with rapidly evolving policy incentives and downstream demand.

USAR acquires Less Common Metals to accelerate mine-to-magnet strategy

USA Rare Earth

USAR acquires Less Common Metals in a $125mn deal that reshapes non-Chinese rare earth supply chains. The USAR acquires Less Common Metals transaction combines upstream resources, metal production and magnet alloys into one integrated platform. As a result, USAR acquires Less Common Metals to strengthen Western access to critical rare earth magnet materials.

USAR acquires Less Common Metals to secure rare earth metals and alloys

USAR acquires Less Common Metals through a mix of $100mn cash and 6.74mn USAR shares. The acquisition brings LCM’s Cheshire plant, which produces light and heavy rare earth metals and strip cast magnet alloys. LCM supplies samarium, samarium–cobalt, neodymium praseodymium, terbium, yttrium and gadolinium for permanent magnet applications. This portfolio anchors USAR’s move into high-value magnet metals rather than only rare earth oxides. LCM is the only large-scale producer of such metals and alloys outside China, making its assets strategically important. Therefore the deal immediately boosts Western capacity along the magnet value chain. USAR plans to expand LCM’s UK production footprint to meet rising demand from defense, automotive and industrial customers.

Building an integrated mine-to-magnet platform in the US and UK

USAR will integrate LCM’s know-how into its Stillwater, Oklahoma, facility to support a planned 5,000 t/yr magnet plant. This integration creates a tighter loop from rare earth metal production into finished magnet manufacturing. At the same time, USAR’s Round Top rare earth deposit in Texas will underpin long-term feed for metals and alloys. The company also highlights its ability to process recycled rare earth oxides, adding a circular element to the supply chain. Together, these assets form a closed-loop mine-to-magnet model spanning mining, metals, alloys and recycling. LCM’s established customer relationships across US and European magnet makers, as well as defense and automotive supply chains, provide immediate market access. As a result, the combined group can offer Western buyers secure, non-Chinese supply options for critical rare earth magnet materials.

The Metalnomist Commentary

This acquisition underscores how quickly mine-to-magnet integration is becoming a strategic priority in the rare earth sector. If USAR executes on its expansion plans, it will sit at the center of a transatlantic magnet supply chain that reduces reliance on Chinese metal and alloy producers. For policymakers and OEMs, the deal offers a concrete example of how capital, geology and processing know-how must align to de-risk critical materials.

Jinli Magnet Permanent Magnets Output Rose as NEV and Robotics Demand Expanded

Jinli Magnet

Jinli Magnet permanent magnets production increased strongly in 2025 as demand from new energy vehicles, wind turbines, robots and industrial motors continued to expand. The Chinese magnet manufacturer produced 34,400t of high-performance rare earth permanent magnetic materials, up 17% from a year earlier.

Jinli Magnet permanent magnets sales also rose, with finished magnet materials product sales increasing by 21% to 25,300t. Capacity utilisation exceeded 90%, showing that downstream demand remained strong across electrification-linked industries.

Jinli Magnet permanent magnets growth highlights the rising importance of neodymium-iron-boron materials in global industrial supply chains. These magnets are critical for EV traction motors, wind turbine generators, inverter air conditioners, servo motors, robotics and energy-efficient industrial equipment.

NEVs and Industrial Motors Drove Magnet Revenue Growth

JLM’s revenue rose 14% on the year to 7.7bn yuan in 2025, while profit surged by 142% to 706mn yuan. The earnings improvement reflected higher magnet sales, stronger capacity utilisation and demand growth from higher-value applications.

The NEV and automobile components sector remained the company’s largest growth engine. Revenue from this segment rose by 30% to 3.9bn yuan, underlining the importance of rare earth magnets in electric drivetrains and automotive electrification.

The inverter air conditioner industry also contributed strongly, with revenue rising by 13% to 1.9bn yuan. This shows that energy efficiency remains a major demand driver for high-performance NdFeB magnets beyond electric vehicles.

Robotics and Wind Power Support Long-Term Rare Earth Magnet Demand

JLM is preparing for further growth by targeting 60,000 t/yr of magnetic materials production capacity by 2027. The company also plans to develop an advanced production line for embodied robot motor rotors.

This expansion reflects the next stage of magnet demand. Robotics, humanoid systems, industrial servo motors and automated equipment require compact, high-torque motor designs, creating new demand channels for high-performance rare earth magnets.

JLM currently has 40,000t of rough NdFeB magnet capacity. Its 2025 revenue also included 488mn yuan from wind turbines, 300mn yuan from robots and industrial servo motors, and 226mn yuan from computer, communication and consumer electronics applications.

Demand from wind turbines and other clean energy industries is expected to rise in 2026. Electrification, energy efficiency and automation will continue to support rare earth magnet consumption, strengthening the strategic value of NdPr, dysprosium and terbium supply chains.

The Metalnomist Commentary

JLM’s results show that rare earth magnet demand is broadening beyond EVs into robotics, industrial motors and energy efficiency. The next competitive battleground will be secure access to rare earth oxides, metal conversion capacity and high-end magnet manufacturing.

Neo Estonia rare earth magnet plant anchors Europe’s mine-to-magnet strategy

Neo

Neo Estonia rare earth magnet plant is emerging as a key pillar in Europe’s drive to localise magnet supply. Neo Performance Materials has officially opened the Neo Estonia rare earth magnet plant in Narva, with phase 1 capacity of 2,000 t/yr. The Neo Estonia rare earth magnet plant is designed to scale up to 5,000 t/yr, directly targeting fast-growing EV and industrial demand.

Neo Estonia rare earth magnet plant secures EV-grade offtake and EU support

The new plant has already shipped sintered magnet samples that meet EV traction motor grade standards. Neo produced around 18,000 assembled magnet pieces during initial runs, demonstrating commercial readiness for Europe’s automotive supply chain. As a result, a top European traction motor supplier has committed to buy 35pc of phase 1 output.

The Neo Estonia rare earth magnet plant also benefits from early support under the EU’s Just Transition fund. This political backing signals Brussels’ intent to build strategic magnet capacity closer to European automakers. Meanwhile, the phased design allows Neo to ramp from 2,000 t/yr to 5,000 t/yr as demand for permanent magnets in EVs, wind turbines and industrial motors accelerates.

Neo is building more than a stand-alone factory in Narva. The company already operates a 3,000 t/yr light rare earth separation plant at Silmet, west of Narva. Therefore, the Estonia hub brings Europe closer to an integrated mine-to-magnet route, reducing over-reliance on Chinese rare earth processing and magnet supply.

Bosch deal accelerates Neo’s mine-to-magnet roadmap beyond Estonia

Neo’s newly announced multi-year contract with Bosch significantly strengthens visibility for future magnet volumes. Under the agreement, Neo will reserve “significant annual magnet production capacity” for the German manufacturer. This commitment supports long-term planning and underpins the business case for expanding magnet capacity beyond Estonia.

At the same time, the Bosch agreement hastens the roadmap for Neo’s next magnet plants in Europe or North America. In addition, the deal positions Neo as a strategic partner for Tier 1 auto suppliers seeking secure rare earth magnet sourcing. For OEMs facing tight margins on EV platforms, diversified magnet supply with transparent ESG credentials is becoming a competitive advantage.

Neo’s strategy of combining separation capacity at Silmet with downstream magnet production in Narva aligns with broader mine-to-magnet ambitions in the Atlantic region. While raw material security still depends on upstream feedstock, Europe now gains an important building block in a more resilient rare earth supply chain.

The Metalnomist Commentary

Europe’s long-discussed mine-to-magnet vision is finally moving from PowerPoint to production lines in places like Narva. Neo’s Estonia complex shows how modest-scale, strategically placed magnet plants can de-risk supply for EV and industrial customers. The real test will be whether upstream feedstock, policy support and OEM offtakes scale fast enough to match China’s entrenched dominance.

Sinomag Magnet Output Capacity Expands in Vietnam and Thailand

Sinomag

Vietnamese Ferrite Plant Boosts Sinomag’s Global Footprint

Chinese magnet producer Sinomag has increased its magnet output capacity at its Vietnam facility, expanding wet pressure magnetic tile production from 8,000 t/yr to 10,000 t/yr. This move is part of Sinomag’s broader strategy to scale global production outside China. The company targets 50,000 t/yr by year-end and 60,000 t/yr in the next few years, reinforcing its leadership in ferrite magnet manufacturing.

Thai Soft Magnet Facility Set for 2024 Launch

Meanwhile, Sinomag is preparing to launch its Thailand plant for soft magnetic materials by the end of the year. With an initial 8,000 t/yr capacity, this marks China’s first overseas soft magnet production facility. The company aims to grow this to 20,000 t/yr over the coming years. Sinomag’s soft magnets are primarily used in automobiles, household appliances, and new energy vehicles — especially in power modules and EV charging stations.

Strong Demand Meets Global Headwinds

Sinomag magnet output capacity increases come despite a 7.5% drop in first-quarter profits, driven by global photovoltaic slowdowns and stiff market competition. Nevertheless, first-quarter revenues rose 1.2% year-on-year to 256.5mn yuan ($35.49mn). The impact of Trump-era 145% tariffs on Chinese magnet imports remains minimal, as U.S.-bound shipments account for less than 3% of Sinomag’s exports.

The Metalnomist Commentary

Sinomag’s capacity expansion reflects a strategic pivot toward international production to mitigate geopolitical risk. Vietnam and Thailand now play key roles in diversifying China's critical materials value chain, particularly in magnets essential to clean tech and automotive sectors.

China NdFeB Magnet Output Rose in 2025 on Strong Downstream Demand

Earth Panda

China NdFeB magnet output increased in 2025 as demand strengthened from new energy vehicles, energy-saving appliances, industrial robots, consumer electronics and wind turbines. The rise confirmed the growing industrial importance of rare earth permanent magnets across electrification and automation supply chains.

China NdFeB magnet output was supported by higher production at major domestic magnet producers. Anhui Earth Panda produced 4,127t of sintered NdFeB magnets, up 24.8% from 2024, while sales rose 24.16% to 4,014t.

China NdFeB magnet output also increased among bonded and soft magnet producers. Galaxy Magnets lifted bonded NdFeB output by 4.98% to 3,606t, while Sinomag raised wet-pressed magnet tile output by 9.34% to 44,992t.

NEVs, Appliances and Robots Supported Magnet Consumption

New energy vehicles remained one of the strongest demand engines for rare earth permanent magnets. China’s NEV sales rose 28% to 16.49mn units in 2025, supported by continued adoption and policy incentives linked to decarbonisation goals.

The NEV sector uses high-performance NdFeB magnets in traction motors, power steering systems and other electrified vehicle components. China’s NEV sales are expected to reach 19mn units in 2026, although growth is likely to slow from the previous year.

Energy-saving appliances also supported magnet demand. China sold 267mn air conditioners in 2025, up 0.7%, with inverter air conditioner sales reaching about 187mn units.

Industrial robots added another growth channel. China’s industrial robot output rose 28% to 773,074 units in 2025, reinforcing demand for compact, efficient motors using rare earth magnet materials.

Wind Turbines Add Long-Term Demand for High-Performance Magnets

Wind power continued to expand the strategic role of rare earth permanent magnets. China’s cumulative wind turbine capacity reached around 640GW by the end of 2025, up 23% from a year earlier.

Offshore wind remains especially important because direct-drive permanent magnet technology is widely used in that market. China’s offshore wind capacity reached about 47GW, with 6.59GW newly installed during 2025.

Global wind additions were also strong. Newly installed wind turbine capacity was estimated at 150GW in 2025, compared with 120GW in 2024 and 121GW in 2023.

The growth outlook points to stronger demand for neodymium, praseodymium, dysprosium and terbium. However, rising inventories at some Chinese magnet producers show that supply growth must be balanced carefully against end-market absorption.

The Metalnomist Commentary

China’s magnet sector is benefiting from the convergence of EVs, robotics, appliances and wind power. The next strategic issue is whether rare earth oxide, metal conversion and high-end magnet capacity can keep pace without creating another inventory cycle.

upply to VAC supports US magnet manufacturing

Ucore rare earth

Ucore rare earth supply to VAC will underpin a new US magnet manufacturing hub in South Carolina. The Ucore rare earth supply to VAC centres on separated oxides from Ucore’s Louisiana and Ontario facilities for eVAC’s Sumter County plant. As a result, the Ucore rare earth supply to VAC strengthens a non-Chinese supply chain for critical magnet materials.

Building a North American rare earth magnet value chain

Ucore will supply neodymium, praseodymium, terbium, dysprosium, samarium and gadolinium oxides to VAC and its subsidiary eVAC. These separated rare earth oxides will feed eVAC’s new permanent magnet facility in Sumter County, South Carolina. The plant targets high-performance magnet demand from EVs, wind turbines and defense systems.

The deal leverages Ucore’s planned Louisiana Strategic Metals Complex and its Commercial Demonstration Facility in Ontario. These assets aim to become key separation hubs for non-Chinese mixed rare earth concentrates. VAC, a leading German magnet producer, gains secure North American feedstock close to downstream customers.

Feedstock security through diversified offtake agreements

Ucore has been assembling a diversified pipeline of rare earth feedstock ahead of Louisiana SMC commissioning. It previously signed an agreement with Australia’s Metallium to potentially secure mixed rare earth concentrate. Ucore also has a non-binding offtake with US developer Critical Metals for 10,000 t/yr of rare earth concentrate.

These arrangements reduce single-source risk and improve resilience against geopolitical disruptions. Meanwhile, VAC’s US investment aligns with government efforts to localise permanent magnet production for EV and defense supply chains. Both parties now have nine months to finalise long-term commercial terms, including volumes, pricing structures and potential take-or-pay elements.

The Metalnomist Commentary

This Ucore–VAC alignment is a textbook example of how midstream separation and downstream magnet capacity are finally linking up in North America. The success of Louisiana SMC and eVAC’s Sumter County plant will be a key test of whether non-Chinese rare earth supply chains can scale fast enough to meet accelerating magnet demand.

Heavy rare earth free NdFeB alloy from VAC targets China-independent magnet supply

Vacuumschmelze

Heavy rare earth free NdFeB alloy from VAC marks a major shift in Western magnet strategy. German producer Vacuumschmelze has launched VACODYM 902 TP, a neodymium-iron-boron grade that avoids dysprosium and terbium. As a result, the heavy rare earth free NdFeB alloy offers high performance while reducing exposure to increasingly volatile heavy rare earth markets.

VACODYM 902 TP extends VAC’s family of reduced-HRE NdFeB grades. The new heavy rare earth free NdFeB alloy achieves a remanence of at least 1.40 Tesla and a coercivity of at least 1,190 kA/m. These metrics place it firmly in the high-performance segment for traction motors and industrial drives. Therefore, OEMs gain an alternative to conventional NdFeB magnets that rely on dysprosium and terbium to maintain coercivity at elevated temperatures.

Western buyers have sought heavy rare earth free NdFeB alloy solutions for several years. Dysprosium and terbium production still concentrates overwhelmingly in China, which creates structural supply risk. Meanwhile, policymakers and OEMs push for magnet designs that reduce heavy rare earth intensity without sacrificing performance. VAC’s new grade directly responds to this pressure and is fully produced within Western supply chains.

Export controls and price spikes intensify heavy rare earth risk

China’s export controls on certain rare earths have tightened heavy rare earth availability for Atlantic buyers since April. Spot prices for dysprosium and terbium outside China surged immediately after the controls. European terbium oxide prices rose by 268pc between 1 April and early September, reaching $3,300-3,800/kg cif Europe. As a result, magnet makers now face severe raw material cost volatility and procurement uncertainty.

This environment accelerates the search for alternatives to heavy rare earth dependent NdFeB grades. VAC explicitly cites volatile raw material costs and market uncertainty as major supply chain challenges. Therefore, its new alloy is positioned as a “geopolitically independent alternative” to traditional heavy rare earth based solutions. The goal is clear: decouple magnet performance from a small, politically sensitive set of Chinese-controlled metals.

Other Western players are also moving to build ex-China heavy rare earth capacity. Lynas has started small-scale dysprosium and terbium oxide production in Malaysia. US producer Energy Fuels has produced pilot-scale dysprosium and plans larger-scale dysprosium and terbium output in Utah by late 2026. MP Materials supplies a heavy rare earth concentrate, SEG+, containing dysprosium and terbium for downstream processors.

Western magnet supply chains pivot toward diversified feedstocks

VAC’s launch of a heavy rare earth free NdFeB alloy fits a broader diversification trend. Western magnet producers and their customers want designs that either use fewer heavy rare earths or none at all. This shift complements efforts to develop new mining, separation and recycling capacity outside China. It also supports OEM strategies to meet ESG targets and reduce geopolitical risk in EV and wind supply chains.

VAC emphasises the importance of resilient, regionally anchored magnet value chains. Its new alloy, fully produced in the West, supports that objective. However, performance in real-world motor and generator platforms will ultimately determine adoption. Automotive and industrial customers will test VACODYM 902 TP against existing HRE-containing grades on efficiency, temperature stability and cost.

If performance proves comparable, heavy rare earth free NdFeB alloy families could gain rapid traction. That would gradually reduce Western dependence on Chinese dysprosium and terbium, even as new ex-China projects ramp up. In parallel, recycling and alternative motor topologies may further ease heavy rare earth demand over the next decade.

The Metalnomist Commentary

VAC’s move shows how magnet technology, not only mining, will shape the next phase of the rare earth race. A commercially viable heavy rare earth free NdFeB alloy gives Western OEMs a real lever to hedge against Chinese export controls and price spikes. Market participants should watch qualification timelines closely, because large-scale adoption could materially shift dysprosium and terbium demand forecasts.

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.

Golden Dragon Magnet Output Expansion Strengthens Baotou NdFeB Capacity

Golden Dragon, Rare Earths

Golden Dragon magnet output is set to expand as the Chinese rare earths and magnet producer prepares trial production at the second phase of its Baotou plant in Inner Mongolia. The new phase is scheduled to start trial operations in December.

Golden Dragon magnet output at the second phase will add 5,000 t/yr of high-performance neodymium-iron-boron magnetic materials. The first phase began trial operations in September 2025 and is already running at full capacity of 5,000 t/yr.

Golden Dragon magnet output growth will lift the company’s Baotou high-performance NdFeB magnet capacity to 10,000 t/yr once the second phase is operating. The expansion reinforces Baotou’s role as a key rare earth magnet manufacturing hub in northern China.

The company also operates 15,000 t/yr of rough NdFeB magnet production capacity at its Changting facility in Longyan, Fujian province.

Baotou Expansion Adds High-Performance Magnet Capacity

The Baotou expansion strengthens Golden Dragon’s position in high-performance NdFeB magnets. These materials are critical for electric vehicles, wind turbines, energy-saving motors, robotics, consumer electronics and advanced industrial equipment.

High-performance NdFeB magnets require stable access to rare earth feedstocks such as neodymium and praseodymium. In higher-temperature applications, dysprosium and terbium can also be important to improve magnetic performance and durability.

Golden Dragon’s expansion is therefore not only a capacity addition. It reflects China’s effort to maintain scale and technical leadership in downstream rare earth applications.

The second phase also improves Golden Dragon’s ability to serve customers that require more consistent magnet quality and larger supply volumes. This is particularly important in sectors such as EV motors and wind power, where qualification and long-term supply reliability matter.

As a wholly owned subsidiary of Xiamen Tungsten, Golden Dragon benefits from its parent company’s broader rare earth and metals platform. That connection supports feedstock access, downstream integration and customer development.

EVs, Wind Turbines and Electronics Support Demand

Golden Dragon has been expanding magnet production in response to rapid growth across key application sectors. Demand continues to rise from wind turbines, consumer electronics, energy-saving motors, home appliances and new energy vehicles.

The demand outlook is especially important for high-performance NdFeB magnets. EV traction motors and direct-drive wind turbines require powerful, compact and efficient magnetic materials.

Energy-saving motors and smart appliances are also increasing magnet consumption. As efficiency standards rise, manufacturers need stronger magnetic materials to improve performance and reduce energy use.

Xiamen Tungsten’s 2025 results show the strength of this broader materials platform. The company’s revenue rose by 30.79% on the year to 46.26bn yuan, while profit increased by 34.89% to 2.3bn yuan.

Revenue from Xiamen Tungsten’s rare earths sector rose by 10% to 6bn yuan in 2025. This reflects continued demand for rare earth materials and magnet-related products despite growing competition in the sector.

For China’s rare earth value chain, Golden Dragon’s Baotou expansion reinforces a strategic advantage. China remains dominant not only in rare earth separation, but also in downstream magnet manufacturing, where industrial scale and customer qualification are difficult to replicate quickly.

The Metalnomist Commentary

Golden Dragon’s Baotou expansion shows that China is still building strength at the most valuable end of the rare earth chain. The strategic issue for global buyers is not only rare earth supply, but access to qualified magnet capacity at industrial scale.

Cyclic VAC US magnet recycling partnership boosts North American circularity

Cyclic Materials

The Cyclic VAC US magnet recycling partnership marks a major step toward a circular rare earth magnet supply chain in North America. Under a new 10-year exclusive deal, Cyclic Materials will recycle swarf from VAC’s Sumter, South Carolina magnet plant. As a result, the Cyclic VAC US magnet recycling partnership links cutting-edge US magnet manufacturing with low-carbon, recycling-based feedstock.

Building a circular rare earth magnet supply in the US

The Cyclic VAC US magnet recycling partnership will capture byproducts from VAC’s US production lines. VAC produces neodymium-iron-boron magnets for automotive, defense, industrial and renewable energy uses. Meanwhile, the Sumter facility will anchor long-term supply for General Motors’ EV platforms under a decade-long agreement.

Cyclic will process the swarf into recycled rare earth raw materials with a reported 75pc lower carbon footprint than mined material. In parallel, Cyclic plans to invest over $20mn in a Mesa, Arizona plant. That facility is designed to process 25,000 t/yr of end-of-life magnet components from early 2026. Together, these projects push US magnet recycling beyond pilots and into industrial scale.

VAC’s US growth links primary offtake and recycling loops

VAC’s US expansion combines primary offtake, federal funding and recycling partnerships into one integrated ecosystem. E-VAC, VAC’s US subsidiary, has secured more than $200mn from the US Defense and Energy departments. These funds support the Sumter plant, which will ramp magnet output through the decade.

At the same time, VAC signed an offtake agreement with Pensana for mixed rare earth carbonate from Angola’s Longonjo project. That deal will support eVAC’s magnet output rising from 2,000 t/yr to 12,000 t/yr by 2029. The Cyclic VAC US magnet recycling partnership adds a second feedstock leg, closing material loops around swarf and, in time, end-of-life magnets. Therefore, VAC’s model blends upstream mining offtake with downstream recycling to reduce dependence on Chinese supply.

The Metalnomist Commentary

This partnership shows how serious US and allied players have become about mine-to-magnet-to-recycle value chains. If Cyclic can scale its Arizona facility as planned, swarf and scrap could evolve from waste streams into strategic feedstock. For OEMs like GM, a resilient US magnet base that mixes primary and recycled material will be central to long-term EV and defense planning.

EU wind magnet supply resilience: roadmap to cut China dependence by 2030

EU Wind

Europe’s wind industry launched an EU wind magnet supply resilience roadmap to reduce reliance on China. The plan targets 30% “resilient” permanent magnets by 2030. It also aims for 50% by 2035, with 35% rare earths from resilient sources by 2030. This EU wind magnet supply resilience push aligns with the Critical Raw Materials Act and fast-growing offshore wind needs.

OEM actions and timelines to build resilient magnet supply

Manufacturers must move quickly to secure EU wind magnet supply resilience. OEMs will identify alternative magnet suppliers and sign MOUs by mid-2025. They should then qualify and onboard suppliers, with offtakes finalized by end-2026. As a result, resilient production should deliver magnets by late 2028. First “resilient wind turbines” could commission in 2029.

Policy tools, recycling, and market design to diversify sources

The roadmap defines resilience through diversified sourcing across mining, separation, and magnet making. It counts recycled magnets as resilient, supporting circular supply chains. Meanwhile, it urges raw-materials funds, grants, and loans to de-risk projects. It also proposes pooled EU demand, a magnet budget in the Innovation Fund, and a new EU magnet price index.

Europe’s plan responds to tightening Chinese export controls on rare earth magnets. Therefore, OEMs need flexible qualification criteria through 2028 to widen supplier pools. Stricter prequalification may start in 2030, pending review. Ultimately, resilient NdFeB supply should stabilize costs and timelines for offshore wind expansions.

The Metalnomist Commentary

This roadmap sets practical milestones that match turbine project cycles. Execution now hinges on rapid financing for European NdPr processing and magnet lines. Watch how recycling volumes and non-Chinese feedstock contracts scale through 2028.

MP Materials NdPr Production Rises as US Magnet Supply Chain Expands

MP Materials

MP Materials NdPr production rose sharply in the first quarter as the US rare earth producer increased output of the key magnet feedstock used in electric vehicles, wind turbines, robotics, defence systems and advanced manufacturing.

MP Materials NdPr production reached 917t of neodymium-praseodymium oxide in January-March, up 63% from a year earlier. The company also sold 1,006t of NdPr oxides during the quarter, including initial shipments to its newest US customer.

MP Materials NdPr production is strategically important because NdPr oxide remains the most important input for rare earth permanent magnet production. The company believes NdPr access will remain the main constraint on economically viable magnet production outside China for at least the next five years.

The company produced just under 13,000t of rare earth oxides in the first quarter. Its loss narrowed to $8mn on revenue of $91mn, compared with a loss of $23mn on revenue of $61mn a year earlier.

NdPr Price Floor Supports US Supply Chain Economics

MP expects its realised NdPr price in the second quarter to be in the low-to-mid $90/kg range. However, its public-private partnership with the US Department of Defense provides a $110/kg price floor.

That structure is commercially important. If MP sells below the floor, the partnership offsets the difference between the realised price and $110/kg.

The price floor gives MP stronger revenue visibility while it expands downstream rare earth capacity. It also shows how the US government is using market-support tools to build domestic supply chains for strategic materials.

This is critical because rare earth magnet supply outside China still faces weak economics, limited scale and high qualification barriers. A price floor can help bridge the gap between strategic supply security and market pricing.

MP is also advancing its magnet business. The company expects initial magnet revenue in the second half of 2026 as it develops new magnet grades and customer specifications.

The magnet strategy includes improved chemistry and materially lower heavy rare earth content. This matters because dysprosium and terbium are expensive, supply-constrained and heavily exposed to Chinese processing dominance.

If MP can reduce heavy rare earth intensity while maintaining magnet performance, it could improve cost competitiveness and reduce supply-chain risk.

Heavy Rare Earth Separation Adds Strategic Optionality

MP is commissioning its heavy rare earth separation circuit before July and expects to produce dysprosium and terbium later this year. It also plans to produce high-purity samarium oxide, with potential gadolinium oxide and other heavy rare earth products depending on market attractiveness.

The company’s position on heavy rare earths is selective. MP does not want upstream project ownership in heavy rare earths and is instead focused on diversifying its feedstock supply chain.

That strategy reflects a practical view of the rare earth market. Heavy rare earths are strategically important, but MP sees NdPr oxide as the binding constraint for non-China magnet production.

MP expects dysprosium and terbium prices to decline substantially because it believes they are secondary to the larger NdPr bottleneck. This view suggests that the company sees heavy rare earth scarcity as important, but not as decisive as securing sufficient NdPr oxide.

Midstream metalization remains another challenge. MP currently uses toll processors and is discussing options with domestic and international partners.

The company expects to continue using toll processing while exploring low-cost metalization routes globally. This shows that the US rare earth chain still has gaps between oxide production, metal conversion, alloying and final magnet manufacturing.

For the wider market, MP’s first-quarter performance is an important signal. The US is gradually moving from rare earth mining and oxide output toward a more integrated magnet supply chain, but every step requires qualification, processing capacity, customer acceptance and policy support.

The Metalnomist Commentary

MP’s stronger NdPr output shows that the US rare earth strategy is moving from resource ownership toward usable magnet feedstock. The price floor is the key industrial signal: Washington is now willing to support market economics where strategic supply chains cannot yet compete with China on price alone.

High-Purity Iron Plant Targets US Rare Earth Magnet Supply Gap

Hertha Metals

High-purity iron is emerging as a hidden bottleneck in the US rare earth magnet supply chain as new defense sourcing rules approach. Houston-based Hertha Metals plans to build a 10,000 t/yr plant in Texas to produce high-purity iron used in neodymium-iron-boron permanent magnets.

The project targets a less visible vulnerability in magnet manufacturing. US policy has focused heavily on rare earth elements such as neodymium and praseodymium, but NdFeB magnets also require high-purity iron. Hertha Metals says about 90% of this material is currently produced in China.

The timing is strategically important. Updated Defense Federal Acquisition Regulations are set to take effect on 1 January 2027, restricting Chinese-origin rare earth magnets and constituent materials in covered US defense systems. That rule could force defense contractors, magnet makers and upstream material suppliers to rebuild supply chains around non-China sources.

Hertha Metals plans to break ground later this summer. The company says its Texas plant will become the first domestic producer of high-purity iron for this application, positioning the project at the intersection of magnet security, steelmaking technology and US industrial policy.

DFARS Rules Put Magnet Inputs Under Supply Chain Pressure

The 2027 DFARS deadline changes the strategic value of upstream magnet materials. Compliance will not depend only on where final magnets are assembled. It will also depend on the origin of constituent materials used in defense-related systems.

This creates a direct opportunity for domestic high-purity iron. NdFeB magnets require neodymium, praseodymium and often dysprosium or terbium for performance, but iron remains the major base component. If high-purity iron remains China-dependent, US magnet supply chains could still face compliance risk even if rare earth oxides or metals are sourced elsewhere.

Hertha Metals is trying to address that gap with its FLEXHERS process, short for flexible fuel hydrogen electric reduction smelting. The process combines electric arc furnace technology with natural gas or hydrogen to produce iron and steel.

The company says the technology can use lower-grade ores and iron ore fines that are difficult to process economically through conventional blast furnace routes. This could widen the domestic feedstock base and reduce dependence on imported high-purity iron.

Hertha currently operates a one-tonne-per-day demonstration plant in Conroe, Texas. It describes the site as the largest demonstration-scale single-step steelmaking facility in the US. Ore is sourced domestically from Minnesota, and the pilot facility is already producing material that meets customer specifications.

The planned high-purity iron facility will also produce trial steel products. Hertha sees the project as a stepping stone toward broader iron and steelmaking capacity, with a target of reaching roughly 500,000 t/yr of production within four to five years.

Cost competitiveness will be critical. Hertha says it does not plan to rely on a domestic supply premium. Instead, it aims to compete economically by replacing metallurgical coal with natural gas and electricity while using lower-cost ore feedstocks.

This claim matters because strategic materials projects often struggle when policy support is stronger than market economics. If Hertha can produce competitively without relying on premium pricing, the company could build a more durable position in both defense and commercial supply chains.

Hertha Metals CEO Laureen Meroueh

Domestic Iron Production Links Magnets, Electrical Steel and Clean Manufacturing

High-purity iron has strategic importance beyond NdFeB magnets. The material can also support electrical steel used in transformers, electric vehicle motors and other electromagnetic applications. These sectors are becoming more important as grid investment, electrification and domestic manufacturing policy expand.

The project also fits a wider shift in iron and steel markets. Traditional blast furnace production depends heavily on metallurgical coal and higher-emission processing routes. Meanwhile, demand for higher-grade iron inputs suitable for lower-carbon steelmaking is expected to rise as producers shift toward cleaner technologies.

Hertha’s process aims to sit inside that transition. By using electricity, natural gas or hydrogen, the company is positioning FLEXHERS as a lower-carbon alternative to legacy ironmaking. The ability to process lower-grade ore and fines could also help revive domestic iron production without requiring only premium feedstocks.

The US steel industry has increasingly focused on scrap-fed electric arc furnaces. That model supports recycling and lower emissions, but it does not fully solve domestic iron supply for high-purity applications. Magnets, electrical steel and advanced components often need controlled chemistry that scrap alone cannot easily provide.

This is where Hertha’s strategy becomes industrially relevant. The company is not only proposing another steel plant. It is targeting a specific materials gap between critical minerals policy, rare earth magnet manufacturing and advanced steelmaking.

Competition from subsidized overseas producers remains a risk. Hertha says it can compete on cost, but Chinese industrial support and below-cost exports could still challenge domestic producers. This is why policy, procurement rules and long-term customer commitments may become important even if the production technology works.

The company has not disclosed financing details, future fundraising plans or offtake agreements. That leaves open questions about capital structure, customer readiness and the pace of commercial scale-up. However, the 2027 DFARS deadline gives the project a clear market catalyst.

The broader implication is that rare earth magnet supply security cannot be solved by rare earth mining alone. The full chain includes ore, separation, metal conversion, alloying, magnet manufacturing and supporting inputs such as high-purity iron. Any weak link can create dependence.

Hertha Metals is betting that the next phase of US critical materials policy will recognise that reality. If the company can scale production, secure customers and maintain cost discipline, high-purity iron could become a small but essential piece of the domestic magnet supply chain.

The Metalnomist Commentary

Hertha Metals highlights a critical point often missed in rare earth policy: magnet security depends on more than rare earths. High-purity iron, electrical steel and alloy inputs will become strategic materials if US defense and electrification supply chains must move away from China.

JLM Secures Rare Earth Magnet Export Permits to US

Jinli Magnet

Chinese Manufacturer Gains Approval Amid Tight Export Controls

Jinli Magnet (JLM), one of China’s major magnet producers, has obtained export permits for magnets containing medium and heavy rare earths to the US. The company applied for permits following Beijing’s April 4 implementation of export controls on certain rare earth products. While volumes were undisclosed, approvals also cover shipments to Europe and Southeast Asia.

JLM, which exports magnetic materials, components, and motor rotors, reported export revenue of 312mn yuan ($43.3mn) in Q1 2025, with the US accounting for 122mn yuan. The firm stated it will continue applying for permits in compliance with Chinese regulations, only proceeding with shipments once approvals are granted.

Impact on US Automakers and Global Supply Chains

Market participants report that US automakers GM, Ford, and Stellantis received permits for permanent magnets containing restricted rare earths, enabling them to advance electric vehicle projects worth billions of dollars. Several Chinese producers also secured permits for European and Vietnamese automotive orders.

Despite the easing, China’s magnet exports to the US will remain limited to essential manufacturing needs to safeguard strategic resources. Some permits are valid for only 3–6 months, suggesting continued supply uncertainty. April’s export controls caused a sharp drop in shipments — only 246t reached the US, the lowest since February 2020 — and tightened global supply, driving spot prices higher outside China.

The Metalnomist Commentary

JLM’s export approval underscores China’s strategic balancing act between resource security and global supply chain stability. While this move offers short-term relief to US and European automakers, the short validity of permits signals ongoing supply risks. The industry should expect continued volatility in rare earth magnet availability and pricing.

Ex-China Rare Earth Demand to Stay Weak Amid Economic Headwinds and EV Industry Struggles

China Rare Earth

Global demand for rare earth elements (REEs) outside of China is expected to remain subdued in the coming months, as macroeconomic challenges and sluggish industrial activity continue to weigh on end-user sectors. The rare earth market, which plays a crucial role in electric vehicles (EVs), renewable energy, and high-tech manufacturing, has seen only modest demand growth in 2024, with contract negotiations for 2025 suggesting little change ahead.

Muted Demand Growth for Rare Earths in 2025

Market sources across the Atlantic region and Japan report that rare earth consumption has remained steady but unimpressive, with purchasing volumes under discussion for 2025 aligning closely with 2024 levels. Industries that rely on rare earths—including catalysts, phosphors, ceramics, and glassmaking—are waiting for an industrial revival to drive greater demand.

While the automotive magnetics sector has shown signs of recovery, the broader ex-China automotive industry continues to struggle. The weak performance of EV manufacturers outside of China has been a key factor limiting rare earth demand, particularly for neodymium (Nd), praseodymium (Pr), and dysprosium (Dy), which are essential in permanent magnets used in EV motors.

"We don’t see much change in demand next year," said a market participant. "We are expecting similar volumes under supply contracts for most industries and are actively seeking new applications for rare earth materials to offset the weak market conditions."

Inventory Caution Amid Geopolitical and Shipping Disruptions

Another major concern heading into 2025 is inventory management, as companies work to maintain stable supply chains while avoiding overstocking. With high interest rates and tight margins, international trading firms remain cautious about restocking and taking on new commitments.

"We are still being careful about restocking," said a trader. "It looks like rare earth prices might stay low next year, so the margins are narrow."

Further complicating supply chains, shipping disruptions in the Red Sea have extended lead times for Chinese rare earth shipments to up to 12 weeks this year. While container freight rates have softened since their summer peak, they started rising again in late 2024 as businesses rushed to complete shipments ahead of a potential strike by the International Longshoremen’s Association (ILA) in North America.

US Tariffs on Chinese Magnets Could Reshape Market

Looking further ahead, the US' planned 25% tariff on Chinese permanent magnets, set to take effect in 2026, is another factor that could reshape the rare earth market. The move has been welcomed by some companies as a way to level the playing field and support new US-based permanent magnet production, but its actual impact remains uncertain.

The US magnetics industry has taken small steps toward securing domestic supply chains, occasionally sourcing ferro-gadolinium and ferro-dysprosium from the spot market. However, with domestic magnet production still in its early stages, US demand for Chinese rare earth oxides, metals, and alloys remains high. Even when the tariff is implemented, industry experts warn that it may not be enough to significantly reduce reliance on Chinese magnets, as non-China-produced magnets typically command a price premium well above 25%.

Potential Trade War Escalation Under Trump Administration

Adding further uncertainty is president-elect Donald Trump’s proposed 60-200% tariffs on all Chinese imports, which could be implemented after his inauguration in January. While most analysts expect rare earth materials to be excluded due to US dependence on China, heightened geopolitical tensions and the increasing focus on critical minerals could lead to unexpected policy shifts.

As 2025 approaches, market participants remain watchful of potential developments in US-China trade relations, as any changes could significantly impact global rare earth supply and pricing dynamics.

Conclusion

Despite some recovery in automotive magnetics, overall rare earth demand outside China is expected to remain weak in 2025 due to macroeconomic headwinds, EV industry struggles, and cautious inventory management. The US' planned tariffs on Chinese magnets could reshape long-term supply chains but are unlikely to reduce reliance on Chinese rare earths in the near term. Meanwhile, trade policy uncertainties under the Trump administration add another layer of unpredictability for rare earth markets going forward.