China’s recent decline in exports of rare earth magnets is reigniting the debate about security of supply and trade policy. According to authorities, exports fell by 6.1% in September compared to August, to 5,774 tons – and this was even before Beijing announced a significantly expanded export licensing requirement. For customers from the automotive industry to smartphone manufacturers and the defense sector, rare earths remain the strategic issue of the hour.
Rare Earths: Exports Decline – Figures and Trends
In August, exports of rare earth magnets reached a seven-month high of 6,146 tons. September now marks the end of this three-month upward trend. Although deliveries increased by 17.5% year-on-year in September, exports totaled 39,817 tons in the nine-month period – a decrease of 7.5% compared to the corresponding period in 2024.
The most important destination countries recently included Germany, South Korea, Vietnam, the USA and Mexico. While exports to the United States fell by 28.7% in a month-on-month comparison, deliveries to Vietnam rose by 57.5%. In Europe, the Netherlands stood out with an increase of 109% compared to August – an effect that is also due to the role of the Port of Rotterdam as a transshipment hub.
Behind the bare figures are products that are used in numerous key technologies: Neodymium-iron-boron (NdFeB) magnets, some alloyed with dysprosium or terbium, are central components for electric motors, wind power generators, precision drives and military systems. Accordingly, sensitivity is high when the world’s leading supplier of rare earths adjusts its export flows.
Export Controls and Licensing Regimes in Focus
Market observers see the current fluctuations in the context of ongoing trade policy tensions. As early as spring, Beijing had tightened export restrictions for various rare earth products and related magnets, while punitive tariffs were again being discussed between Washington and Beijing. After a brief period of relaxation, the debate is now flaring up again: according to industry circles, China is applying stricter scrutiny to export permits – similar to April at the height of the conflict. Officially, the Ministry of Commerce in Beijing emphasizes that it approves licenses for civilian use and criticizes an alleged misinterpretation of the measures by the USA.
Analysts nevertheless warn that civilian-commercial customers could slip into possible restrictions when it comes to making it more difficult for American armaments companies to access critical materials. Voices from politics underline the explosiveness of the situation: Amidst the publication of the latest customs statistics, Washington insisted that it would not be drawn into a “rare earth game.” At the same time, it was signaled that further tariff steps would be linked to China’s agricultural import commitments. Beijing, in turn, points out that the new, broader controls are in line with the regulations of other major economies and are scheduled to come into force shortly before the expiry of a current 90-day tariff truce on November 10.
Consequences for Industry and Supply Chains
For industry in Europe, North America and Asia, the latest developments are increasing planning uncertainty. Although rare earths are not a scarce element per se, processing and especially magnet production are heavily concentrated in China. A more restrictive licensing policy can de facto act like a bottleneck: production plans for electric vehicles, wind energy projects, consumer electronics or precision machines depend on reliable supply chains. Short interruptions can often be cushioned by inventories; however, persistent delays increase the cost of procurement and inventory management and increase dependence on intermediaries and transit hubs such as Rotterdam.
The latest flows also reveal possible re-routing effects: While exports to the USA declined, deliveries to Vietnam increased significantly – a pattern that could indicate changed trade routes and intermediate processing. For Germany and other European customers, it remains crucial whether the flow of goods remains stable and whether new approval rules lead to longer lead times. Companies that rely on NdFeB permanent magnets are therefore monitoring not only customs and license reports, but also indicators such as freight times, port handling and insurance premiums.
Outlook: between Trade Policy and Industrial Strategy
Whether the September dip is a harbinger of a longer-lasting throttling depends largely on trade policy. Market analysts expect that export figures could come under renewed pressure after the expansion of controls – especially as negotiators on both sides are striking a tougher tone again. Planned meetings at the highest level – such as between President Xi Jinping and his US counterpart – could bring clarity in the short term, but a longer period of increased volatility seems more likely.
For customers, this means exploring alternatives: diversification of sources of supply, dual supply chains, contractual safeguards and – where technically possible – material substitution or magnet-saving designs. At the same time, several regions are investing in their own value-added stages of rare earths, from refining to magnet production. These projects require time and capital; in the short term, China’s market power in rare earth magnets remains a defining factor.
Ucore Rare Metals in the Eye of the Storm
In the midst of this explosive situation is the Canadian Ucore Rare Metals (WKN A2QJQ4/ TSXV UCU), which has just developed a method for processing rare earth starting materials called RapidSX that is superior to conventional methods. At Ucore, the increasingly acute situation has already been recognized years ago and a conscious decision has been made to establish itself as part of a Western supply chain for rare earths. According to the company, RapidSX is not only faster than the Solvent Extraction (SX) commonly used in China, but also has a significantly less negative impact on the environment.
Ucore plans to commission a first production line as early as the second half of 2026. Further production lines are then to be gradually put into operation in the plant in the US state of Louisiana, which has already been funded by the US Department of Defense with a total of more than USD 22 million.
Conclusion: The current export data and the tightened licensing underscore that rare earths will continue to be in the area of tension between industrial needs and geopolitics. For global supply chains, this means: greater attention, longer lead times – and the need to systematically reduce strategic dependencies.
