Highlights

• Network analysis shows global rare earth trade network is structurally fragile, with potential 50% connectivity loss from removing key trade nodes.
• China remains the central hub across rare earth product categories.
• New players like Vietnam and Malaysia are gaining prominence.
• Study highlights strategic challenges for Western supply chain planners.
• Suggestions for potential diversification strategies in rare earth magnet trade.

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A groundbreaking network analysis from Northeast Normal University and the Chinese Academy of Sciences has mapped the evolving vulnerabilities of the global rare earth (REE) supply chain. Published in China Mining Magazine (Vol. 34, Issue 6), the study deploys trade flow data from 2000 to 2022 and simulates targeted disruptions to expose alarming systemicweaknesses.

So, What are the Findings?

The global rare earth element (REE) trade network—especially for rare earth metals and compounds—exhibits significant structural fragility. Simulation analysis shows that removing just 10% of key trade nodes, such as China, the United States, or Germany, results in more than a 50% drop in overall network connectivity.

Despite this vulnerability, China remains the undisputed central hub across all four major REE product categories: raw metals (HS280530), chemical compounds (HS2846), ferroalloys (HS720299), and permanent magnets (HS850511). However, while China’s dominance persists, new influential players are emerging. Vietnam and Malaysia have gained prominence in the metals and magnet segments, and Myanmar has become China’s leading source of rare earth compounds. Notably, the trade network for rare earth magnets is the most resilient, buoyed by diversified global demand—particularly from electric vehicles and wind energy—and broader participation from emerging economies.

Policy and Investment Implications

• The study highlights the crucial role of China not only in production but also in maintaining trade stability. China’s potential as both a stabilizer and disruptor poses strategic challenges for Western supply chain planners.
• U.S. and EU calls to “decouple” risk running into severe fragility, particularly if alternative supply nodes (e.g., India, Brazil, South Africa) are not rapidly industrialized.
• The relatively high resilience of the rare earth magnet trade presents a pragmatic entry point for countries seeking to diversify their REE supply.

Critical Questions Raised:

• Can the U.S., Japan, and EU fast-track magnet or compound-level processing capabilities before the next geopolitical shock?
• How will Myanmar’s political instability affect its role as China’s top midstream supplier?
• Are current Western funding efforts addressing the most fragile nodes or simply reinforcing existing dependencies?

This study provides one of the most comprehensive spatiotemporal vulnerability mappings of the REE sector to date. For retail investors, it’s a data-driven wake-up call: understanding trade topology may be as vital as tracking mine output.

Source: Song Jinyu et al., China Mining Magazine (opens in a new tab), June 2025

DOI: 10.12075/j.issn.1004-4051.20251129