Highlights
- China shipped 7,742 tonnes of rare earth elements in June, a 60% increase since 2009.
- This increase potentially indicates diplomatic maneuvering with the United States.
- Export controls remain in place, with heavy rare earths still tightly controlled.
- This suggests the change is tactical rather than structural.
- The export spike represents a geopolitical strategy.
- Beijing still maintains significant control over global rare earth supply chains.
China’s rare earth exports surged 60% in June—the highest since 2009—triggering speculation of a diplomatic thaw with the United States. But investors should hold their applause.
According to customs data, China shipped 7,742 tonnes last month, a sharp jump from both May and June 2024. On the surface, it looks like Beijing is easing its grip after an April clampdown designed to flex its dominance in response to U.S. semiconductor sanctions and tariffs. The South China Morning Post (opens in a new tab) cites anonymous sources suggesting quiet agreements with the U.S. may be behind the move. Select American manufacturers reportedly received six-month export licenses, and China’s Commerce Ministry pledged to improve export approvals for European firms.
Sounds like progress—until you look closer.
There’s still no official confirmation of any new deal between Washington and Beijing. The licensing news lacks detail: who got access, for how much, and on what terms? More importantly, heavy rare earths—critical for defense and EV motors—remain tightly controlled. Beijing may simply be releasing supplies strategically to cool rising prices, soothe European complaints, or influence U.S. policy.
What’s missing from the narrative is context: China’s export controls aren’t gone—they’re being adjusted. And for all the talk of easing, global buyers remain at the mercy of opaque Chinese approvals.
Investor takeaway
This export spike isn’t a structural reset. It’s a tactical move in a larger geopolitical chess game. Without transparent pricing, diversified refining, or enforceable trade norms, the West’s vulnerability to rare earths remains. For now, Beijing still sets the terms, and Washington still plays catch-up. Yes, the recent MP and Department of Defense deal this month represents a significant milestone on the pathway toward an ex-China market. But a long, steep trek lies ahead.
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