The General Administration of Customs of the Communist Party of China announced on Monday, October 13th, that the export of rare earths from China in September decreased by 31% compared to the previous month, marking the third consecutive month of decline. Meanwhile, as the trade war between the United States and China intensifies, rare earth stocks surged.
Last week, China introduced new control measures for rare earths, which triggered a strong backlash from U.S. President Trump, escalating the U.S.-China trade war. With the continuous three-month decline in rare earth exports from China, doubts are expected to arise regarding the increased export agreements between Beijing and Europe and the United States.
China is the world’s largest exporter of rare earths, with the export volume in September totaling 4,000.3 tons, a drop of 30.9% compared to the previous month, reaching the lowest level since February.
So far this year, China’s rare earth export volume has reached 48,355.7 tons, an increase of 13% year-on-year.
Cory Combs, Director of Key Mineral Research at Trivium China, a consultancy firm specializing in Chinese economic policies, told Reuters, “The obvious question is whether China (the CPC) has restricted exports, especially to the United States or the European Union.”
“I suspect there are multiple factors at play, not just a single factor such as permitting regulations. But only with the release of national export data later this month can we finally determine,” he added.
Fluctuations in rare earth exports are common, with significant fluctuations often observed. Since Monday’s data is aggregated, it is still unclear which products and countries are affected. For example, while the total rare earth exports decreased in July and August, the export volume of rare earth magnets increased.
Detailed breakdown data will be released on October 20.
China produces over 90% of processed rare earths and rare earth magnets globally. These 17 rare earth elements are essential materials for various products such as electric vehicles, aircraft engines, and military radars.
Since the CPC implemented export controls on seven rare earths and their products in April this year, it has affected European and American companies. This has led to a surge in rare earth mining. As China weaponizes rare earths, Western policymakers are reducing their reliance on China. According to a leaked department briefing reported by the Australian newspaper on Sunday, as part of an agreement with the United States, Australia is considering establishing a strategic mineral reserve valued at 1.2 billion Australian dollars (7.82 billion US dollars).
On Monday, shares of Arafura Rare Earths Ltd., a rare earth mining company in the Northern Territory of Australia, rose by 27%, reaching the highest level in over two years. Lynas Rare Earths Ltd. saw an 8.5% increase in stock prices, Iluka Resources Ltd. rose by 6.3%, and Australian Strategic Materials Ltd. surged by 42%.
Earlier this year, the U.S. company MP Materials received support from the Pentagon. Last week, its stock price rose over 8% in the New York stock market, reaching an all-time high closing price.
(Parts of this article were based on reports from Reuters)