China's Rare Earth Exports in June Rise 30% from Previous Month... Signs of Negotiation Success

Specific Export Items Not Disclosed

China's rare earth exports in June increased by more than 30% compared to May, leading to analysis that behind-the-scenes negotiations between the United States and China may have borne fruit. However, since the specific export items have not been disclosed, there are also suspicions that the proportion of low-priced products may be high, rather than high-quality rare earths.

On July 14 (local time), Bloomberg News reported, citing an announcement from China's General Administration of Customs, that China's rare earth exports in June reached 7,742.2 tons, a 60.3% increase compared to the same period last year. This is also 32% higher than the export volume of 5,865 tons in May. The South China Morning Post (SCMP) noted that this is the highest level since December 2009.

With global demand for rare earths remaining strong, it appears that the Chinese government has increased export approvals. SCMP stated, "This could be an early sign that behind-the-scenes agreements between China and the United States on critical minerals are beginning to bear fruit."

The United States and China agreed to a "truce" during the first round of trade negotiations held in Switzerland in May, lowering tariffs by 115 percentage points for 90 days. However, China's rare earth export controls continued, and during the second round of trade negotiations held last month, discussions took place regarding the lifting of China's rare earth export controls. In return, the United States promised to ease semiconductor sanctions against China.

However, SCMP explained that the announced figures cover not only rare earths subject to China's export controls, but all rare earth metals and minerals. It is necessary to wait for future announcements to see the detailed export performance by item.

There is also a possibility that China increased exports of inexpensive minerals while reducing exports of high value-added rare earths. Xu Tianchen, chief economist at the think tank Economist Intelligence Unit (EIU), noted that the export value in June, measured in dollars, decreased by 47% compared to the same period last year, suggesting that there may have been changes not only in prices but also in the composition of exports.

Meanwhile, China's cumulative export volume for the first half of the year (January to June) totaled 32,569.2 tons, an increase of 11.9% compared to the same period last year.