Major Taiwanese news network Liberty Times Network (LTN) recently reported that China’s export restrictions on rare earth products once disrupted parts of the global automotive industry’s supply chain and were seen as a diplomatic achievement by China against the U.S. However, China’s blockade of rare earth exports has caused a 75 percent decline in rare earth magnet exports, further exacerbating the difficulties faced by China’s rare earth industry, which was already in trouble due to the slowdown in China’s economy.
Within two months of China’s rare earth export controls being implemented, China’s rare earth magnet manufacturers’ sales were hit hard. Coupled with the fierce price war in China’s electric vehicle market, magnet manufacturers faced a double blow. Warehouse inventories are currently piling up and export restrictions have created a crisis for some Chinese magnet manufacturers. Many of them have temporarily lost important customers, and the recovery time is unpredictable.
Public documents show that China produces 90 percent of the world’s rare earth magnets and consumes most of them. Looking at 11 major listed Chinese magnet companies, the proportion of their revenue from exports last year ranged from 18 percent to 50 percent. At this point, analysts generally expect that these Chinese manufacturers will face long-term export delays and additional financial burdens, and that this situation may trigger overall industry restructuring pressure in China. However, the Chinese government may not reject such developments as this would help further consolidate the government’s control over the rare earth industry.
Source: LTN, July 8, 2025
https://ec.ltn.com.tw/article/breakingnews/5100146