Surge in China’s Rare Earth Magnet Exports to the US: Implications for Businesses in Oman and Beyond
BEIJING: In June, China’s exports of rare earth magnets to the United States surged to over seven times the volume recorded in May, indicating a significant rebound in the supply of essential minerals used in electric vehicles and wind turbines following a Sino-U.S. trade agreement.
According to data released by the General Administration of Customs, outbound shipments to the U.S. from the world’s leading producer of rare earth magnets reached 353 metric tonnes, marking a 660% increase from the previous month.
This upturn followed agreements established in June aimed at addressing shipping challenges related to rare earth minerals and magnets to the United States. Notably, chipmaker Nvidia is set to resume sales of its H20 AI chips to China as part of this pact.
China, which supplies over 90% of the global rare earth magnet market, had previously added several rare earth items to its export restriction list in early April as a countermeasure against U.S. tariffs. This led to a marked decline in shipments during April and May, largely due to the lengthy process required to secure export licenses, significantly disrupting the global supply chain. Consequently, some automakers outside China faced production halts due to a shortage of rare earth materials.
In total, China’s global exports of rare earth permanent magnets reached 3,188 tonnes in June, an increase of 157.5% compared to 1,238 tonnes in May; however, this figure remains 38.1% lower than in June 2024. Analysts anticipate that shipments of magnets will continue to recover in July, as an increasing number of exporters secured licenses in June. For the first half of 2025, rare earth magnet exports declined by 18.9% year-on-year, totaling 22,319 tonnes. — Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The sharp increase in China’s rare earth magnet exports to the U.S. signals a resurgence in the critical minerals market, which could open new opportunities for Omani businesses involved in the manufacturing and supply chain of electric vehicles and renewable energy solutions. However, investors should be cautious of potential trade volatility, given the ongoing geopolitical tensions, and consider diversifying into alternative supply sources or investing in local technology initiatives to mitigate risks associated with dependency on external supplies.
