{"id":20138,"date":"2025-08-18T21:57:17","date_gmt":"2025-08-18T21:57:17","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2025\/08\/18\/rare-earths-market-update-h1-2025-in-review\/"},"modified":"2025-08-18T21:57:17","modified_gmt":"2025-08-18T21:57:17","slug":"rare-earths-market-update-h1-2025-in-review","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2025\/08\/18\/rare-earths-market-update-h1-2025-in-review\/","title":{"rendered":"Rare Earths Market Update: H1 2025 in Review"},"content":{"rendered":"<\/p>\n

Supported by growing permanent magnet demand in 2024, the rare earths market started 2025 on an uptrend. <\/strong><\/p>\n

Concerns about supply chain stability quickly added to market sentiment as China and US trade tensions targeted the rare earth sector early in the year. <\/p>\n

Through Q1 mounting geopolitical uncertainty related to Ukraine and Russia and Trump\u2019s tariffs added volatility and sparked concerns that China would tighten controls over the sector.<\/p>\n

As the year unfolded domestic supply chain growth became a primary focus for the US, adding support to several US-based mining companies. <\/p>\n

In response to ever-changing tariffs levied by President Trump, in early April China flexed its grip on the rare earth market with Announcement 18, a sweeping export control measure from the Ministry of Commerce and General Administration of Customs. <\/p>\n

The policy, framed as a national security and nonproliferation safeguard, requires exporters to obtain licenses for a slate of medium and heavy rare earths\u2014including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium\u2014along with their oxides, alloys and compounds. <\/p>\n

Additionally the export of permanent magnet and rare earth technology faced similar safeguards. <\/p>\n

The move added a fresh layer of regulatory complexity for global supply chains reliant on these critical materials for high-performance magnets, electronics, defense, clean energy and advanced manufacturing. <\/p>\n

Countering the new restrictions, President Trump issued an Executive Order to examine the security of the critical mineral supply chain into the US, with a focus on rare earths.<\/p>\n

\u201cPresident Trump recognizes that an overreliance on foreign critical minerals and their derivative products could jeopardize US defense capabilities, infrastructure development, and technological innovation,\u201d noted the White House statement. <\/p>\n

\n

China eases restrictions
<\/h3>\n

By June the global auto sector was feeling the pressure of China\u2019s new restrictions.<\/p>\n

\u201cWith a deeply intertwined global supply chain, China\u2019s export restrictions are already shutting down production in Europe\u2019s supplier sector,\u201d said Benjamin Krieger, Secretary General of the European Association of Automotive Suppliers (CLEPA). <\/p>\n

\u201cWe urgently call on both the EU and Chinese authorities to engage in a constructive dialogue to ensure the licensing process is transparent, proportionate, and aligned with international norms,\u201d he added.<\/p>\n

Used in both electric and internal combustion engine vehicles, CLEPA went on to warn of more auto sector shutdowns if the situation was not rectified. <\/p>\n

To quell growing anxieties around supply security in the auto industry, trade discussions between Chinese Minister of Commerce Wang Wentao and EU Trade Commissioner Maro\u0161 \u0160ef\u010dovi\u010d, were held in Paris. <\/p>\n

The meeting resulted in China introducing a \u201cgreen channel\u201d to speed up export licenses for rare earths, particularly benefiting select European Union firms, a few days later. <\/p>\n

The diplomatic overture also extends to US automakers, through export licenses granted to rare earth suppliers serving major American auto players like General Motors (NYSE:GM), Ford Motor (NASDAQ:F) and Stellantis (NYSE:STLA). <\/p>\n<\/div>\n

\n

US lasers in on mined supply growth
<\/h3>\n

China has long controlled the vast majority of the rare earth market, overseeing 69 percent of annual mine production, 85 percent of refining and processing capacity and 90 percent of magnet manufacturing. <\/p>\n

Likely spurred on by China\u2019s long standing control of the rare earth market through mining, refinement and production the US has amped up its support of a domestic rare earth supply, through investment in mining companies and permit streamlining. <\/p>\n

Most notably was the US$400 million in funding from the Department of Defense for MP Materials (NYSE:MP) operators of the Mountain Pass mine in California, the country\u2019s only rare earth mine. <\/p>\n

The DoD investment announced in July, will fund the expansion of MP\u2019s processing capabilities at the Mountain Pass site and support the construction of a second magnet manufacturing facility in the US. In turn the DoD will have a domestic source and supply of permanent magnets for defense applications. <\/p>\n

\u201cRare earth magnets are one of the most strategically important components in advanced technology systems spanning defense and commercial applications. Yet today, the US relies almost entirely on foreign sources,\u201d the MP statement read. \u201cThis strategic partnership builds on MP Materials\u2019 operational foundation to catalyze domestic production, strengthen industrial resilience, and secure critical supply chains for high-growth industries and future dual use applications.\u201d <\/p>\n

A few days later the public sector also showed support, when Apple (NASDAQ:AAPL) penned a US$500 million deal with MP to produce rare earth magnets in the US using 100 percent recycled materials.<\/p>\n

Starting in 2027, MP will supply magnets for \u201chundreds of millions\u201d of Apple devices, advancing the tech giant\u2019s push for sustainable, domestic supply chains.<\/p>\n

Apple CEO Tim Cook called the partnership a step toward securing vital materials for advanced technology while bolstering US innovation.<\/p>\n

Internationally, Lynas Rare Earths (ASX:LYC,OTC Pink:LYSDY) achieved a significant sector milestone in May by producing on-spec dysprosium oxide at its Malaysian facility, marking the first commercial heavy rare earths output outside China.<\/p>\n

CEO Amanda Lacaze said the development strengthens supply chain resilience, giving customers in Japan, the US and Europe an alternative source for critical materials and positioning Lynas as the world\u2019s only producer of separated heavy rare earth products beyond China\u2019s borders.<\/p>\n

These moves were applauded by industry watchers as concrete steps in reducing reliance on Chinese supply, however some argue they don\u2019t go far enough. <\/p>\n<\/div>\n

\n

Mid and downstream build out
<\/h3>\n

During a keynote presentation at the 2025 Rule Symposium in Boca Raton, Nomi Prins, economist, author and former Wall Street executive described what she calls the \u201creal asset uprising,\u201d a global shift in value and power driven by hard assets like precious metals, energy metals and rare earths.<\/p>\n

\u201cThe entire US defense system runs on China\u2019s processing of rare earths, and that is one of the reasons why there is a current 232, investigation into the importance of critical minerals, and particularly those 17 rare earths, because this is an issue you don\u2019t want, even in peacetime,\u201d she said. <\/p>\n

\u201cYou\u2019re basically relying on China, another country, to define what you need to run your defense, also what you need to run the growing energy requirements. <\/p>\n<\/div>\n

<\/span><\/p>\n

Listen to Prins discuss the real asset uprising, as well as the precious metals market. <\/em><\/p>\n

While Prins advocates for expansion of the entire supply chain, Mountain Partners\u2019 Chris Berry, sees strategic investment in refining, processing and manufacturing as the most prolific way to expand North American supply. <\/p>\n

\u201cIf the US government was going to fund something in the magnet supply chain, I would argue it\u2019s either magnet process or magnet building capacity, or, more importantly, rare earth separation capacity,\u201d he added. <\/p>\n

Not only would the move reduce US dependence on China for rare earth magnets, Berry noted that getting refinement and processing facilities built is a much faster process than permitting mines. <\/p>\n

\u201cIf we\u2019re talking about building a mine, it could take 10 to 15 years \u2014 sometimes more, depending on the situation,\u201d he said. \u201cRefining capacity is different. From finding a site and securing permits to raising capital and building the facility, you could be looking at five years, maybe less, though it depends on the material \u2014 whether it\u2019s rare earths, nickel or something else.\u201d<\/p>\n

Berry argued that boosting refining capacity is key to reducing reliance on China. <\/p>\n

\u201cYou strike deals with raw material producers, maybe they\u2019re Canadian, Australian, Chilean, or even from parts of Africa. The point is, refining gets you to a usable product much faster,\u201d he explained. <\/p>\n

Berry continued: \u201cAsk a battery manufacturer what they can do with spodumene or raw nickel \u2014 the answer is, not much. But give them battery-quality material, and they can trial it and integrate it into their supply chain. It\u2019s a much more realistic approach.\u201d<\/p>\n<\/div>\n

\n

Global collaboration only way to compete with China <\/h3>\n

While a concerted effort like Berry described is key to quickly building out and fortifying a North American supply chain, tariff tensions with many countries around the globe hasn\u2019t fostered much allyship for the US.<\/p>\n

However, as Berry and Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies argue, the US can\u2019t do it alone. <\/p>\n

\u201cIf countries continue to operate independently instead of collectively, China will retain its dominant position because no single nation has enough market leverage on its own,\u201d Baskaran wrote in a June overview.<\/p>\n

Raising the warning bells of an impending crisis, the report went on to note. <\/p>\n

\u201cPrices for neodymium-praseodymium oxide\u2014the principal rare earth component in neodymium-iron-boron magnets\u2014have fallen below US$60 per kilogram. If prices stay below US$60 per kilogram through 2030, approximately half of the projected supply originating outside of China is expected to become economically unviable. In fact, at this price point, only eight rare earth projects beyond China are expected to break even on direct production costs.\u201d <\/p>\n

According to Baskaran, China\u2019s use of export controls has heightened the urgency of building critical mineral supply chains with allied nations.<\/p>\n

However, she believes this won\u2019t happen without market intervention, as China continues to flood the market. <\/p>\n

While US tariffs on Chinese imports are one option, their impact would be limited\u2014the US accounts for just 1.7 percent of rare earths consumption, along with similarly small shares of other key minerals.<\/p>\n

Any price-shaping strategy would require coordination with major consuming nations such as Australia, Canada, Japan, South Korea, the UK and the EU.<\/p>\n<\/div>\n

\n

Market bifurcation
<\/h3>\n

According to an August report from Benchmark Source, China\u2019s newly imposed export restrictions on heavy rare earth oxides (HREOs) have created a pronounced regional price split. <\/p>\n

While domestic Chinese prices remain relatively stable, markets outside China are seeing significant surges, driven by increased demand for ex-China supply. <\/p>\n

This divergence underscores how export controls can distort global price dynamics, propelling up costs where alternatives are scarce while leaving domestic markets largely shielded.<\/p>\n

Light rare earths were also pushed higher by the broad market tailwinds. <\/p>\n

The rest of the year could see more upward momentum in light of China \u201cquietly\u201d issuing its first rare earth mining and smelting quotas of the year in July. <\/p>\n

\u201cThis low-key approach is part of China\u2019s continued efforts to tightly control its rare earths supply chain,\u201d the Benchmark report read. \u201cIt is likely that the impacts of this quota will further contribute to a bullish market sentiment over the next few months.\u201d<\/p>\n<\/div>\n

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Supported by growing permanent magnet demand in 2024, the rare earths market started 2025 on an uptrend. Concerns about supply chain stability quickly added to market sentiment as China and US trade tensions targeted the rare earth sector early in the year. Through Q1 mounting geopolitical uncertainty related to Ukraine and Russia and Trump\u2019s tariffs […]<\/p>\n","protected":false},"author":0,"featured_media":20139,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-20138","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/20138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=20138"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/20138\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/20139"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=20138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=20138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=20138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}