Sharp Drop of 74% in Chinese Rare Earth Magnet Exports
Ford Vice President: "Barely Scraping By"
Despite a recent trade agreement between the United States and China, the Chinese government has not fully lifted its export restrictions on rare earths, resulting in an ongoing shortage. Major automakers in the United States and Europe continue to face difficulties securing rare earth magnets, and competition to establish alternative supply chains is intensifying.
Sharp Decline in Chinese Rare Earth Magnet Exports... Export Restrictions Remain
Leading Chinese rare earth magnet exporters report that they have gradually increased export permit volumes following the US-China trade agreement. JL MAG, a Chinese magnet manufacturer supplying rare earth magnets to Tesla, Bosch, and General Motors (GM), stated during a conference call on the 13th that "we are gradually securing export permits for the United States, Europe, and Southeast Asia." Another rare earth magnet manufacturer, Beijing Zhongke Sanhuan Hi-Tech, also announced that "export permits have been obtained for some orders."
However, the automotive industry says it has not yet felt any tangible effects from China's rare earth export permits. On the 19th, the Chinese Ministry of Commerce said only that it was "accelerating the review of applications and has approved a certain number of applications that met the requirements" regarding rare earth export permits, without disclosing specific figures. The Wall Street Journal (WSJ) interpreted this as evidence that, even after the second trade agreement reached between the United States and China in London on the 11th, Chinese authorities have not fully lifted the export restrictions on rare earths.
China's rare earth magnet exports saw a significant decline last month. According to the General Administration of Customs of China, rare earth magnet exports in the previous month totaled 1,200 tons, a 74% decrease compared to the same month last year.
Ford Vice President: "Barely Securing Magnets, Just Scraping By"
Global automakers are still struggling to secure rare earth magnets. Lisa Drake, Vice President of Ford, told the WSJ, "Securing magnets is extremely difficult, and we are barely scraping by," adding, "We are still adjusting volumes at each plant to avoid production stoppages due to raw material shortages." Ford previously announced that its electric vehicle production line in the Chicago area was halted for a week last month due to a shortage of rare earth magnets before resuming operations.
Hildegard Mueller, President of the German Association of the Automotive Industry (VDA), also emphasized, "Even if some export permits for magnets have been issued by China, it is still not enough to ensure smooth production," and warned, "If the situation does not improve rapidly, it will be difficult to rule out the possibility of further production delays or stoppages in the future."
Frank Eckard, CEO of German magnet manufacturer Magnosphere, told the Financial Times (FT), "Several automakers, including Porsche, are requesting additional magnets to prevent production line stoppages," adding, "Everyone says price is not important; they just want 2,000 magnets."
US Races to Secure Rare Earth Supply Chain... Magnet Production to Begin Next Year
US companies are rushing to begin rare earth magnet production to address supply shortages. The Washington Post (WP) reported that USA Rare Earths, a US rare earth mining and magnet manufacturing company, plans to start producing 600 tons of neodymium magnets annually from early 2026 at its rare earth facility currently under construction in Oklahoma. Joshua Ballard, CEO of USA Rare Earths, stated, "In a few years, we will produce more than 5,000 tons of magnets annually, generating $800 million (about 1.09 trillion won) in revenue each year."
Previously, MP Materials, a US rare earth mining company that received $45 million (about 61.4 billion won) in support from the Biden administration in 2022, plans to begin rare earth magnet production as early as the end of this year. MP Materials currently owns the only rare earth mine in the United States, the Mountain Pass Mine in California, and established a magnet plant in Fort Worth, Texas, last year. The company aims to produce 1,000 tons of magnets annually to supply GM.
The US government has also expressed its intention to support rare earth mine development. On the 8th, US Secretary of the Interior Doug Burgum mentioned the new rare earth mine under development in California during an interview with Fox News, stating, "The California Colosseum Mine Project is a pivotal measure to strengthen the US critical minerals supply chain." The mine is located about 10 kilometers from the Mountain Pass Mine and has been under development by Australian mining company Dateline Resources since 2021.
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