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China’s export restrictions on rare earths have bolstered its geopolitical hand but triggered steep losses and production cuts for its magnet manufacturers, already hit by weak domestic demand and shrinking overseas sales.
The export curbs, imposed in April in response to U.S. tariffs, slashed magnet exports by 75% in two months and forced several global automakers to pause production. While China dominates rare-earth magnet production, exports accounted for up to half of revenue for some major producers in 2024.
Baotou Rare Earth Products Exchange, a state-backed trading platform, said the restrictions had created a “crisis” for some manufacturers and warned that any recovery, even after a U.S.-China deal in late June to resume rare-earth flows, would take time to implement. Inventory has continued to build in warehouses.
“Their sales are now being squeezed from both ends – disrupted exports and flagging domestic demand,” said Ellie Saklatvala, head of metal pricing at Argus.
“They have temporarily lost an important part of their customer base, with no certainty about when they will regain it.”
Two rare-earth magnet producers told Reuters that revenue is expected to fall this year, though they declined to be named due to the sensitivity of the issue. Small and medium-sized producers cut output by around 15% in April and May, according to a source familiar with the situation.
The highly customised nature of many magnet products makes it difficult to reroute them into the domestic market, forcing producers to store unsold cargo while awaiting export licences.
Though listed firms such as Baotou Tianhe Magnetics Technology Co and Yantai Zhenghai Magnetics have acknowledged the risks, most of China’s magnet industry remains private, limiting visibility into the full impact. Analysts say recent share price rebounds may not reflect underlying challenges.
The controls echo previous Chinese export restrictions on other critical minerals such as germanium and antimony.
Despite mainly civilian uses, exports of those materials have yet to fully recover, and similar delays are expected in the rare-earth sector.
David Abraham, a professor at Boise State University, said the increased paperwork and oversight introduced by China’s export licensing regime would have long-term effects.
“In some sense, there's no going back,” he said, noting that the resulting pressure may drive consolidation in an already fragmented industry.
Analysts say further consolidation could suit Beijing’s broader strategy of reinforcing control over the supply chain while leveraging rare earths in geopolitical negotiations.
AnewZ has learned that India has once again blocked Azerbaijan’s application for full membership in the Shanghai Cooperation Organisation, while Pakistan’s recent decision to consider diplomatic relations with Armenia has been coordinated with Baku as part of Azerbaijan’s peace agenda.
A day of mourning has been declared in Portugal to pay respect to victims who lost their lives in the Lisbon Funicular crash which happened on Wednesday evening.
Video from the USGS (United States Geological Survey) showed on Friday (19 September) the Kilauea volcano in Hawaii erupting and spewing lava.
At least eight people have died and more than 90 others were injured following a catastrophic gas tanker explosion on a major highway in Mexico City’s Iztapalapa district on Wednesday, authorities confirmed.
A powerful 7.4-magnitude earthquake struck off Russia’s Kamchatka Peninsula on 13 September with no tsunami threat, coming just weeks after the region endured a devastating 8.8-magnitude quake — the strongest since 1952.
Vietnam's most devastating storm this year brought heavy rains that triggered floods across its north, disrupting flights and train services with the capital, Hanoi, where schools were closed and many homes inundated, authorities said on Tuesday.
Türkiye has joined Spain, Italy and Greece in monitoring an international flotilla carrying aid for Gaza that was sailing east across the Mediterranean Sea on Monday despite warnings from Israel to stop the mission, flight data show.
U.S. President Donald Trump and his Democratic opponents appeared to make little progress at a White House meeting aimed at heading off a government shutdown that could disrupt a wide range of services as soon as Wednesday.
Indonesian rescuers were racing on Tuesday to find 38 people feared trapped beneath the rubble of an Islamic boarding school that collapsed in East Java during afternoon prayers, killing three, according to disaster officials.
Start your day informed with AnewZ Morning Brief: here are the top news stories for 30th of September, covering the latest developments you need to know.
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