What are the problems with deliveries of rare earth magnets from China

 

The current issues with deliveries of rare-earth magnets from China are a mix of political restrictions, supply chain bottlenecks, and regulatory hurdles.

  1. Stricter Export Controls
  • Licensing requirements — Since early 2025, China has made exporters obtain special permits for certain rare-earth products, especially magnets containing dysprosium (Dy) and terbium (Tb) (used in high-temperature applications like EV motors and wind turbines).
  • Exporters must submit detailed end-user declarations and lab-verified chemical analyses before shipping.
  • Many applications are being denied or delayed, with some automakers reporting only ~25% approval rates.
  1. Delivery Delays and Volume Drops
  • In May 2025, China’s rare-earth magnet exports dropped by more than 50% month-on-month, the lowest in five years.
  • June saw a brief rebound, but July exports fell another 23%, indicating ongoing volatility.
  • These swings make it difficult for manufacturers to plan production schedules.
  1. Impact on Global Industries
  • Automotive and EV production: Many carmakers hold only 4–6 weeks of magnet inventory. Disruptions longer than 30 days can cause production delays of 4–6 months.
  • Electronics, defence, and renewable energy sectors are also feeling the pinch because high-performance magnets are critical for motors, sensors, and generators.
  1. Geopolitical Leverage
  • China produces ~90% of the world’s rare-earth magnets, so even modest policy changes ripple worldwide.
  • The restrictions are partly viewed as a response to trade tensions and technology export bans from Western nations, making supply security more uncertain.
  1. Logistics and Contract Issues
  • Shipments that do get export clearance can still face port backlogs and customs delays inside China.
  • Some foreign buyers are struggling with contract compliance because delivery dates in existing agreements are impossible to meet under the new licensing regime.
  1. Cost Pressure
  • Scarcity is pushing up prices for NdFeB (neodymium-iron-boron) magnets and other rare-earth products.
  • U.S. buyers also face a 25% tariff on Chinese magnets, further raising costs.

In short:
Deliveries from China are being slowed or blocked by export licensing rules, unpredictable approval rates, fluctuating monthly export volumes, and geopolitical tension. Industries that depend on these magnets are now stockpiling.