Annealed neodymium iron boron magnets sit in a barrel prior to being crushed into powder at Neo Material Technologies Inc.’s Magnequench Tianjin Co. factory in Tianjin, China, on Friday, June 11, 2010.
Bloomberg | Bloomberg | Getty Images
China’s exports of rare earth magnets to the U.S. fell sharply in September, ending months of recovery as the two economic superpowers remain locked in trade disputes and Washington pushes to secure alternative supply chains.
Data from China’s General Administration of Customs on Monday showed that U.S.-bound exports fell 28.7% in September from August to 420.5 tonnes. That figure was also nearly 30% lower than a year prior.
It was the second consecutive monthly decline after a short-lived rebound that started in June, when Beijing had agreed to expedite rare earth export permits during trade talks with U.S. officials in London.
Chinese rare earth magnet companies have reportedly been facing tighter scrutiny on export license applications starting in September. The customs figures also come from before Beijing expanded its export licensing regime earlier this month.
China has a stranglehold on the production of rare-earth permanent magnets, with an estimated 90% of the market, and a similar dominance in refining the elements used to make them, according to the International Energy Agency.
The magnets are vital for technologies such as electric vehicles, renewable energy, electronics and defense systems. Beijing’s previous restrictions caused shortages and supply disruptions across industries earlier this year.
China’s export curbs have also extended beyond just the U.S., with total rare earth magnet shipments falling 6.1% in September from August, according to customs data.
The disruptions have prompted the U.S. and its partners to accelerate efforts to build alternative rare earths and critical mineral supply chains.
On Monday, the U.S. and Australia signed a minerals deal worth up to $8.5 billion. The agreement includes funding for multiple projects to boost supplies of rare earth and critical mineral materials used in defense manufacturing and energy security.
The deal comes as U.S.-based Noveon Magnetics signed a memorandum of understanding with Australia’s Lynas Rare Earths earlier this month to form a strategic partnership aimed at developing a scalable American supply chain for rare earth magnets.
However, manufacturing rare earth magnets is highly complex and relies on upstream rare earth element mining and refining operations.
Currently, only a handful of U.S. companies manufacture magnets domestically, with many in the early stages of production.
