Rare Earth Rush: China’s June Exports Reach New Heights Since 2009

• China’s rare earth exports hit their highest levels since 2009.
• Exports rose to 7,742 tons in June, a 60% increase compared to last year.
• U.S. suppliers are receiving temporary export licenses to mitigate supply shortages.
• MP Materials signs a major deal with the U.S. Department of Defense.
• DoD guarantees a floor price of $110 per kilogram for key rare earth elements.

China’s Rare Earth Exports Surge in June

Rising tensions between the U.S. and China have fueled a rare earth market that has shown significant fluctuations lately. As the dominant global supplier, China imposed strict export controls beginning in April, influencing international trade dynamics for crucial materials used in powerful magnets and more. Yet, the demand from global consumers appears undeterred, with reports indicating that China’s rare earth exports soared to levels not seen since 2009, marking a notable rebound.

Significant Demand Amid Supply Shortages

According to Bloomberg’s latest reports, China’s June exports of rare earths climbed to a staggering 7,742 tons, reflecting a 60% increase compared to the previous year. This surge is attributed to heightened demand from international magnet manufacturers who are grappling with supply shortages. However, the report points out that these figures do not include permanent magnets, which could significantly affect the overall export volume, as more detailed data is anticipated soon.

U.S. Efforts to Diversify Supply Chain

In another twist, the U.S. has been actively making moves to secure its rare earth supply chains as it aims to decrease its dependency on Chinese sources. Recently, MP Materials, which has engaged in a multibillion-dollar agreement with the U.S. Department of Defense, will be pivotal in this strategy. As part of the deal, the Pentagon is set to become the largest shareholder of MP Materials while also promising a floor price guarantee to bolster the production of essential materials like rare earth magnets, pointing to a significant shift in the landscape of critical mineral production and supply in the U.S.

The recent surge in China’s rare earth exports demonstrates the complexity of trade relations and market demands amid ongoing tensions. The U.S. government’s investment in MP Materials signifies a strategic move to enhance domestic production and reduce reliance on Chinese rare earth materials. As global competition heightens, the landscape for these critical minerals seems poised for further evolution.