China’s dominance of the global rare earths supply chain won’t dwindle easily, even if Beijing decides to approve more export licenses through deals with Europe and the U.S. Three Shenzhen-listed Chinese companies this month said that Beijing approved their exports of magnets with rare earths — metals critical for cars, defense, semiconductors and other industrial products.
But another firm, Baotou INST Magnetic New Materials, said last month the export licenses can only be used for one shipment. In Europe, automotive industry groups have said that, in the case of magnets and heavy rare earths, long-term export licenses from China were only valid for a maximum of six months.
Diversifying away from Chinese sourcing of rare earths is likely to be “extremely difficult” and, at best, a limited long-term solution, according to a Tuesday note from Rico Luman, senior sector economist for transport and logistics at Dutch bank ING.
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