China’s rare earth exports drop as trade war crimps supply

Bloomberg News | May 9, 2025 | 6:59 am Critical Minerals China Rare Earth

COLUMN: Rare earth export restrictions, price spikes and the risk of demand destruction

Baotou City: Epicentre of China’s rare earth industry. Image by Creative Commons CC BY-NC 2.0

Chinese exports of rare earths dropped last month, after the government tightened permits in order to regulate the supply of critical minerals to the US.

Overseas sales fell 16% from March to 4,785 tons, China’s statistics bureau said on Friday, although that was still higher than the year-ago figure.

Rare earths number a total of 17 elements and Beijing added seven of them to its export control list in early April, in response to the increasingly punitive tariffs rolled out by the Trump administration. The latest move to constrict the supply of materials dominated by Chinese producers threatens to derail global supply chains vital for high-tech manufacturing and defense.

China has used a mix of export curbs and outright bans in the past two years on a broad category of strategic minerals, whose applications range across industries, from lasers and radar to magnets, medical devices and munitions. Even when lesser controls were applied, sales of materials like gallium and germanium crashed to zero for months as firms needed time to get certified.

The wider trade data for April showed an economy broadly coping with a worsening trade war with the US, which kicked into high gear at the start of the month with President Donald Trump’s so-called reciprocal tariffs. Copper, iron ore and crude oil were all bright spots in terms of commodities demand.

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Robust consumption kept copper metal purchases around last year’s levels, while concentrate imports hit a record 2.92 million tons.

For iron ore, imports returned to above 100 million tons for the first time this year as supply disruptions in Australia eased and steel demand, including from exports, remained relatively firm. However, moves to cut output suggest more difficult conditions ahead.

Among energy products, oil continued to show resilience, rising from the year before as refineries increased runs ahead of the summer months. But coal and natural gas sank as weak domestic prices reduced the viability of imports.

Soybeans fell from the prior year, while a tepid economy also continued to drag on imports of edible oils and meat.