China’s Rare Earth Magnet Exports to the US Increased for the First Time in Three Months in October

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China exported 656 tons of rare earth magnets to the US in October, a year-on-year increase of 4.5%. This is the first year-on-year increase in three months, and a month-on-month increase of 56.1%. This may be in line with China’s willingness to make concessions on rare earth issues in preparation for the Sino-US summit at the end of October to reach an agreement.

Based on data from China’s General Administration of Customs, statistics compiled by the Chinese research company “Ferroalloy Online” show that China’s total rare earth magnet exports in October reached 5,473 tons, a year-on-year increase of 15.8%. By country, exports to Germany were the highest, increasing by 55.9% to 1,118 tons, followed by the US. Exports to South Korea were third, at 569 tons, a year-on-year increase of 31.3%.

Amidst the stalemate in Sino-US negotiations, China’s rare earth magnet exports to the US are projected to decrease to 46 tons by May 2025 (compared to over 400 tons per month in 2024), and China has requested the US to ease restrictions on semiconductors from China. As negotiations progressed, exports to the US rebounded to 619 tons in July, before declining again in August and September. Some believe that China increased exports again to secure an agreement at the US-China summit.

Exports to Japan in October increased by 30.2% year-on-year, reaching 226 tons. However, if semi-finished rare earth magnets—magnetic powder and alloys—are included, exports decreased by 18.3% year-on-year to 538 tons.

Due to Japanese Prime Minister Sanae Takaichi’s parliamentary response regarding the Taiwan issue, China is exerting economic pressure on Japan, and there are concerns that this situation may extend to the rare earth sector.

China accounts for 70% of global rare earth production, and over 80% of rare earth magnet production. China is using rare earths as a diplomatic bargaining chip. Experts familiar with rare earths point out that “exports of the truly needed heavy rare earth elements to the US and Japan remain very limited.”