Heavy Rare Earths: China's Drip Feed Strategy

Highlights

• China's dysprosium and terbium exports recovered in July after months of drought.
• There were limited shipments to South Korea and Japan.
• Export volumes remain significantly lower than previous years, demonstrating China's precise supply chain control and strategic rationing.
• While raw material exports are restricted, China maintains dominance through surging NdFeB magnet exports to multiple international markets.

According to China’s customs authority, July exports of dysprosium and terbium ticked up sharply after months of drought under Beijing’s new authorization regime. Shipments totaled 1,400 kg of dysprosium (all to South Korea) and 7,000 kg of terbium (split between South Korea and Japan). For context, June saw just a single kilogram of dysprosium leave the country. Exports are climbing, but volumes remain well below last year’s levels, when terbium reached nine countries instead of two.

Patterns in the Sand

The article accurately notes a repeat of the gallium and germanium playbook: exports collapse under new controls, then partially recover at lower volumes with a tighter buyer list. This narrowing of customer bases is confirmed by trade data and represents Beijing’s evolving tactic—supply discipline paired with selective approvals.

Where Facts Fade Into Framing

Analyst Jan Giese’s commentary—that terbium is “non-critical” in Beijing’s eyes while dysprosium remains tightly restricted due to defense applications—offers plausible logic. Yet it edges into speculation: China has not explicitly stated such distinctions in public policy. It is a fair inference, not a confirmed doctrine. Similarly, the framing that exports will “normalize” in two to three months may be optimistic; past controls suggest longer-term structural limits could persist.

Why Investors Should Care

For the rare earth supply chain, the key signal is not recovery in kilograms, but contraction in customers. The fact that terbium now goes only to South Korea and Japan, and dysprosium solely to South Korea, illustrates China’s ability to ration access with precision. At the same time, China’s NdFeB magnet exports surged 75% month-on-month, with Germany, the U.S., South Korea, Vietnam, and India leading as buyers. This underscores the paradox: raw material flows are throttled, while finished magnets remain abundant—a supply chain configuration that cements China’s downstream dominance.

Citation: Exports of heavy rare earths increase, but remain at a low level (opens in a new tab). (2025). Tradium Company

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