China’s exports of rare earth permanent magnets to the United States fell in August despite total shipments rising on the back of quicker approvals from Beijing.
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China shipped 6,146 tonnes of permanent magnets last month, up 10.2 per cent month on month and 15.4 per cent year on year, according to official customs data. That marked the highest monthly total since January, when exports reached 6,357 tonnes.
The US, China’s second-largest buyer, imported 590 tonnes in August, down 5 per cent from July when imports had surged 76 per cent month on month. This represented a 12 per cent decline from a year ago – though in terms of value, August’s exports to the US rose 2 per cent.
By contrast, exports to the European Union (EU) continued to rise, as companies in the bloc step up efforts to secure relaxed restrictions amid an increase in production stoppages.
Rare earth permanent magnets are essential components in electric vehicles, wind turbines, smartphones, aeroplanes, spacecraft and other devices, including in the defence industry. In August, researchers from Govini, a defence acquisition analytics firm, estimated that Beijing’s tighter controls could affect more than three-quarters of the US’ weapons supply chain.
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That has turned critical minerals into an important negotiating tool. Earlier this year, when US-China trade tensions escalated, Beijing – which controls the vast majority of rare earth extraction and refining infrastructure – leveraged its position to secure concessions from Washington on the export of certain advanced computer chips.
In July, Washington announced the two countries had agreed on a framework to facilitate rare earth shipments, following earlier talks in Geneva. It also doubled down on efforts to develop its domestic mining and refining infrastructure, with the Pentagon investing US$400 million in July to become the largest shareholder of MP Materials.