(Reuters) -China export restrictions on rare land brought parts of the global cars chain to some extent, and US President Donald Trump fell to the negotiating table. But at home, it is a great headache for companies that are already struggling with a slow economy.
Beijing photographed rare Earth and magnet exports in April in response to the American tariff, as sales of magnet makers abroad pushed at the same time because they face pressure from the weak economy and difficult times in one of their main markets – EVS.
It is unlikely to reduce pain for magnet makers soon, even after the United States announced a deal with China on June 27 for the rare land to flow again.
Baotou Rare Earth Products Exchange, a state -backed trading platform, said, noting that any agreement takes a long time to implement.
Export restrictions led to a 75 % decrease in magnet exports in two months after imposing restrictions and forced many international auto makers to stop some production.
Powoto, based in the inner Mongolia, said that the restrictions caused a “crisis” of some local magnet makers.
While China produces 90 % of the rare Earth magnets used all over the world and consumes most of them, exports ranged from 18 % to 50 % of total revenues in 2024 among the 11 largest magnet producers listed for the public by capacity.
“Their sales are now being pressed from both sides – exports and amazing domestic demand,” said Elie Slavidala, head of mineral pricing at the argus commodity information provider.
“They temporarily lost an important part of their customer base, without any certainty about when they will restore it.”
The rare lands are politically sensitive in China and a few rare land companies listed on the major list were commented directly on how the controls affect their business.
However, two rare Earth magnet producers said that Reuters revenue is expected to decrease this year, speaking on condition that his identity is not disclosed given the sensitivity of the case.
“It will have a significant impact on export work, although it is difficult to determine the amount of loss that we will suffer now,” said one of the rare Earth magnet producers.
Young and medium producers made a 15 % cut in April and May, according to another source with the knowledge of the matter, who also refused to call it.
The effect of the export park is reduced
Just like the American chip maker NVIDIA, rare ground magnet makers in China are victims of their importance.
The price of the shares of the magnets listed in April was signed after the export restrictions were announced. However, they climbed their lowest levels in the past three months.
“The recovery depends on any reasonable expectations for the future of the industry.”
“I can see many expectations in the market, more negative or less dependent on the assumptions, but none of them results from a sustainable rise in the share price as we see,” he said.
He said that many magnet makers are also private, so stock prices only tell a limited story.
Many producers have already faced weaker conditions at home, including price war between electric car makers, a major customer sector, which manufacturers have seen requests from suppliers.
In addition, the highly intended nature of many magnet products makes it difficult to reselling shipments locally, forcing magnet makers to store them while waiting for licenses, as four sources said, also speaking anonymous.
The challenges may stimulate unification
The Baotou Tianhe Magnetics Co magnetic company has noticed the export restrictions in its annual report in late April, and said that export revenues may decrease if the international situation has deteriorated.
Yantai Zhenghai Magnetics said last week that it had received export licenses and was normal production. She referred investors to her upcoming financial files to achieve specific operating results.
However, it is unlikely that the rapid return to the previous situation will be if the rare land controls are implemented in a way similar to those in other critical minerals, including germanium and antimony, according to Argus Sklvala.
China has imposed export controls on germanium and antimony over 2023 and 2024. Despite the mostly used by civil industries, which in theory should face some issues in obtaining licenses, exports are still not fully recovered.
Europe receives only a small part of the Antimon it imported from China before imposing export controls last September. The deficiency already causes major problems for acid heatmanship makers, which are usually found in gasoline engines.
“Given the recent export controls in China on other critical minerals – such as Antimon – it may sometimes take time longer than expected to resume exports and normalize them,” SALFLAL added.
David Abraham, a professor of Boys State University in Idaho, said that the large amounts of information required by the export license authorities are a constant change to the industry that will add delay and costs to the producers.
“To some extent, there is no return,” he said.
He said that in an industry that includes hundreds of manufacturers, pressure can lead to monotheism.
“I don’t know if Beijing has seen it is bad, because more monotheism is useful to control and understand where the materials go.”
(Reuters staff mentioned the editor of Luis Jackson and Sonali Paul)
