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The temporary suspension of export control measures between the U.S. and China has failed to cool rare earth prices, as the market remains vulnerable to supply risks outside the United States.
According to Argus Media, dysprosium prices in Europe surged to $910/kg last week—triple the level before China tightened export restrictions earlier this year. Terbium prices also soared to $3,700/kg, roughly four times pre-restriction levels. Both metals are critical for enhancing heat resistance in magnets used in electric vehicle motors.
In April, China imposed export controls on seven rare earth elements, including dysprosium and terbium. On October 9, it significantly expanded these controls, requiring licenses for products manufactured abroad but containing Chinese-origin rare earths.
Despite President Xi Jinping and President Donald Trump agreeing at the October 30 summit to suspend new restrictions and halt the 100% additional tariffs scheduled for November, market concerns persist.
Xuelian Li, a senior analyst at Japan’s Marubeni Research Institute, notes that China’s easing measures primarily aim to maintain the U.S. trade agreement, with supply likely prioritized for the U.S. market. However, other regions may face continued shortages, keeping prices elevated in the short term.
Ellie Saklatvala, head of metals pricing at Argus, highlights that China’s recent export volumes have not significantly increased, while sellers maintain strong negotiating power, enabling them to sustain high prices.
Beyond rare earths, gallium—a critical semiconductor material—faces similar dynamics. China produces 99% of global gallium, per the U.S. Geological Survey.
Beijing restricted gallium exports in 2023 and banned U.S. exports late last year. Post-summit, China suspended the 2024 ban for one year but analysts predict 2023 restrictions will persist, particularly for non-U.S. nations.
European and U.S. gallium prices hit $1,325/kg on November 27—2.3 times higher than early 2023 and the highest since 2002.
Recent Japan-China tensions exacerbate supply concerns. Japan, which faced a 2010 Chinese rare earth export halt, is actively diversifying sources, according to Japanese trade sources.
At the October summit, the U.S. and Japan signed an agreement to strengthen rare earth supply chains, aiming to reduce dependence on China, which dominates this value chain.
Source: Nikkei
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