China’s exports of rare-earth magnets in March slipped 1.6% from a year earlier but climbed 10.5% month-on-month, customs data showed on Monday.
Outbound shipments from China, the world’s largest producer of rare-earth magnets, were 5,238 metric tons last month, data from the General Administration of Customs showed.
Germany, South Korea, Vietnam, the United States and India were China’s top five rare-earth magnet export destinations last month.
Exports to the U.S. in March fell for a fifth consecutive month, down 9.5% from February to a nine-month low of 406 tons, and were 30.6% lower than a year earlier.
In the first quarter of 2026, China’s exports of rare-earth magnets climbed 4.8% to 16,001 tons year-on-year.
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China’s Dominance
China’s dominance in the rare earth sector is driven not by resource scarcity, but by its overwhelming control of downstream processing and metal production. While these minerals are found globally, they are chemically complex and “hell to process,” requiring numerous purification steps that generate toxic and often radioactive waste.
By the early 2020s, China’s “politically orchestrated” monopoly accounted for roughly 70 per cent of global mining and over 90 per cent of processing and finished metal production. This concentration arose because China’s command economy accepted severe environmental and human costs that Western nations rejected through strict pollution controls.
Central to this strategic advantage is the production of rare earth magnets, specifically neodymium-iron-boron alloys, the strongest permanent magnets known. These are essential for electric vehicles, smartphones, and sophisticated defence hardware like the F-35 fighter jet, which contains hundreds of pounds of rare-earth materials.
Historically, Western manufacturers prioritised low costs, allowing domestic separation capacity to disappear and shipping raw ore to China for refining. However, by 2025, Beijing began openly treating rare earths as strategic assets that could be weaponised through export restrictions and licensing regimes, in response to international pressure, highlighting a critical vulnerability in global supply chains.
(with inputs from Reuters)
