China rare earth exports face pressure amid license expirations

Global supply chains for strategic metals are facing pressure due to new export data from China and widening price disparities between world regions. China is reducing exports of key industrial components, evidenced by an 18 percent year-on-year decline in rare earth permanent magnet exports in August, reaching approximately 5,010 tons. Shipments to Japan specifically fell by more than 17 percent, amid reported political tensions between Beijing and Tokyo.

A critical deadline approaches on November 10, when important export licenses in China are set to expire. This occurs shortly before the United States plans to tighten procurement rules (DFARS) on January 1, 2027. While Western nations are attempting to build independent supplies through long-term price guarantees and new cooperation, experts suggest that significant Western capacity for separating heavy rare earths will not be available until between 2028 and 2030.

Market analysts at S&P Global have noted a price paradox: since the beginning of the year, prices for neodymium, praseodymium, dysprosium, and terbium outside of China have risen by up to 105 percent. In contrast, prices within China remain significantly lower, with neodymium-praseodymium oxides currently costing only about 60 percent of the price found in Western markets.