Highlights

• European Union represented 48% of China's rare earth permanent magnet exports in June, marking a 157.5% month-on-month increase.
• Permanent magnets are critical for electric vehicles, wind turbines, and defense systems, and are predominantly produced by China.
• The export surge reflects potential diplomatic maneuvering and short-term easing of China's export quota regime.

In a fresh signal of Europe’s persistent reliance on Chinese rare earths, the European Union accounted for nearly half of China’s rare earth permanent magnet exports in June—the highest share of 2025 so far. According to Chinese customs data reported by the South China Morning Post, 3,188 tonnes of rare earth magnets were shipped globally in June, representing a 157.5% month-on-month increase. Although still 38.2% lower year-over-year, the rebound follows Beijing’s decision to accelerate export license approvals. As Rare Earth Exchanges™ (REEx) has reported, due to the export controls, the prior month of June looked like a surge.

The spike underscores Europe’s critical dependence on Chinese magnet supply chains despite ongoing EU strategic autonomy initiatives. Permanent magnets—integral to electric vehicles, wind turbines, defense systems, and mobile devices—remain dominated by Chinese production. The surge also reflects short-term easing in China’s quota regime after prior months of export contraction, possibly driven by domestic stockpile stabilization or diplomatic maneuvering.

Investor Implications

This development raises several urgent questions for institutional and retail investors:

• Does the EU have a viable near-term alternative to Chinese magnet supply?
• Are China’s license approvals a temporary loosening or part of a longer-term strategic recalibration?
• How will this impact pricing volatility and Western rare earth project financing amid the rollouts of subsidies and tariff pressures?

REEx will continue monitoring shipment data, EU policy responses, and trade flows. Investors should expect continued tension between dependency and decoupling, with significant implications for rare earth equities, defense contractors, and battery tech firms across the transatlantic corridor.

Source: South China Morning Post. (opens in a new tab)