The new export rules announced on 9 October could further shake up the global value chains for critical raw materials. The exact impact on market developments remains to be seen.
After the USA last week once again Initiatives for Western supply chains China returned a few days later with a bang, directly following its own national holidays. On 9 October, the raw materials giant issued a whole series of new export regulations that are likely to have a significant impact on the entire rare earth value chain.
12 of 17 Earths under export control
Firstly, the export control list for rare earths introduced in April was expanded to include some elements from this raw material group. extended. In addition to dysprosium, terbium, yttrium, gadolinium, samarium, lutetium, scandium and their various compounds, the requirements will also apply to holmium, erbium, thulium, europium and ytterbium in future. In addition to pure metals, alloys, oxides and functional materials such as permanent magnets and crystal materials are also affected. A licence must be applied for for their export from 8 November, justified on the grounds of national security, because as so-called dual-use goods, rare earths can have both civilian and military end uses. According to the Entry into force of the measure in April exports of some rare earths fell to zero at times, and the same could be the case with the newly included elements from November.
An overview of the wide range of applications for rare earths can be found on the information page rareearths.com to find.
Products abroad also affected
Another regulationwhich Beijing published on the same day as the updated export control list, affects some products such as permanent magnets that are manufactured outside of China. Licences will also be required for their export if they contain certain rare earths from the People's Republic or were produced using Chinese technologies along the entire value chain of these raw materials.
Furthermore, export licences applied for for military purposes or by companies in the military sector abroad would generally be rejected, writes the Ministry of Commerce. Exports for manufacturers of semiconductors and related equipment would be reviewed on a case-by-case basis. The same applies to the development of artificial intelligence. Some of these rules are to come into force immediately, others gradually from 1 December. Export controls will also be introduced from 8 November for Plants for the production and processing of rare earths introduced.
Jan Giese, Senior Manager Minor Metals and Rare Earths: "The extended export requirements for rare earths from China are very extensive and complex. The changes are causing uncertainty along the supply chain: many questions about the details are currently still open or need to be discussed and worked through. The consequences for the market and for us as traders are therefore not yet foreseeable or assessable. All that can be said with certainty at present is that the granting of export licences along the entire supply chain will become even more complex in the future. And that the global supply situation could become even more challenging."
Tough controls for magnets as a signal to the USA
Specifically with regard to the regulation, which also affects rare earth magnets manufactured abroad, industry experts such as the Centre for Strategic and International Studies (CSIS) from the strictest export controls for rare earths and permanent magnets to date. This step strengthens Beijing's negotiating position in the upcoming talks with the US, where bilateral trade disputes and China's export controls for critical raw materials will be among the topics. At the same time, China's latest steps undermine the USA's efforts to achieve greater raw material autonomy, according to the CSIS analysis. The measures are also in line with existing US export restrictions, which have been restricting China's access to advanced chips and technologies for their production for three years.
Reaction from Washington
Trump reacted immediately to Beijing's latest steps and imposed on Friday additional tariffs of 100 per cent on Chinese exports. There are also to be new export controls for critical software to China. Both measures are to take effect from 1 November.
TRADIUM will continue to follow events closely. As soon as the situation can be better categorised and an assessment of the impact on the rare earth market can be made, we will provide the usual well-founded assessments from our experts.
You can also find up-to-date information on these and other topics at Rawmaterials.net.
