Current situation of sanctions and export restrictions on neodymium magnets from China (September 2025)
In September 2025, China continues to maintain strict export restrictions on neodymium magnets (NdFeB) and rare earth elements, including neodymium, dysprosium and terbium. These restrictions, introduced in April 2025, are a response to tariffs imposed by the US under the Trump administration and trade tensions with the European Union. Despite temporary easing and international agreements, the approval of export licenses remains slow, causing shortages and disruptions in the global supply chain. China, controlling over 90% of global production of these materials, uses them as leverage in trade negotiations. The situation affects not only prices but also innovation in sectors dependent on these resources, forcing companies to seek alternatives and diversify their supply sources.
Timeline of key events in 2025
Here is a table of the most important dates and changes, based on official announcements of China’s Ministry of Commerce (MOFCOM) and customs data:
| Date | Event | Details |
|---|---|---|
| April 2025 | Introduction of export restrictions (MOFCOM Announcement No. 18) | Special license required for NdFeB magnets containing dysprosium (Dy) or terbium (Tb). Exports fell by 51% m/m. |
| May 2025 | 90-day suspension of restrictions after truce with the US | First licenses issued (e.g. for Volkswagen suppliers). Exports down 74% y/y (1.2 million kg). |
| June 2025 | Trump-China agreement; increase in licenses | Exports increased by 157% m/m (3,188 tons), including +660% to the US. Tracking system introduced for the sector. |
| July 2025 | EU-China summit: promise to accelerate deliveries to the EU | Selective licenses, but H1 exports fell 18.9% y/y (22,319 tons). |
| August 2025 | End of suspension (around August 11); tightening of mining quotas | License processing time >45 days; risk of further tightening. |
| September 2025 | Continuation of restrictions despite agreements; export growth but shortages in the EU | Less than 25% of 140 EU applications approved; exports to Europe increased since June but companies fear disruptions. |
Impacts on the global market
Europe and the US: Automotive (e.g. EV and wind turbine manufacturers) and defense companies report production stoppages. In the EU, less than 1/4 of license applications are approved, leading to losses and stockpiling. Exports to Europe have increased since June after agreements, but remain unstable. In the United States, the defense sector experiences delays, prompting accelerated investment in domestic alternatives.
Prices and supply: The initial export decline caused prices to rise by 20–30%, but since June stabilization is visible thanks to licensing. China exports around 40,000 tons annually to the West, producing over 200,000 tons. Shortages have increased market speculation, raising costs for SMEs.
Other countries: Japan and Vietnam are developing domestic production (~25,000 tons/year), but reliance on China remains high. Australia and Brazil are increasing extraction, but processing still largely depends on Chinese technologies.
Future and global responses
Restrictions have no defined end date and may be extended to 2026, depending on negotiations. The US plans a 25% tariff on magnets from China effective January 1, 2026. The world is diversifying supply by building factories and supply chains outside China. China controls over 99% of global refining of key rare earths for high-temperature-resistant magnets, further motivating these efforts. Customers pay a premium for non-Chinese deliveries, and although Chinese volumes are returning to the market, concerns about future shortages remain.
Europe (Estonia): Neo Performance Materials launched in May 2025 its plant in Narva (Sillamäe) – the first commercial EU producer of rare earth magnets. Construction began in 2023, supported by a Just Transition Fund grant (announced Nov 2022). The plant (~100 employees) has a capacity of ~2000 tons of magnet blocks/year (enough for over 1 million EVs or ~1000 turbines). Bosch contracted part of production. Expansion plans: ~600 t/year by late 2026 and ~1200 t by early 2027, with potential higher capacity. A key element of Europe’s “Magnets-to-Magnets” supply chain.
USA: MP Materials is developing a plant in Fort Worth (TX) targeting ~10,000 t/year by 2027, integrating mining (Mountain Pass) with processing and magnet production. USA Rare Earth is leading a project in Stillwater (OK). Government programs (e.g. IRA) and the Pentagon ban on Chinese magnets in defense equipment strengthen local supply.
Europe (others) and globally: VAC Group is building in Sumter (South Carolina, USA) ~2000 t/year by March 2026. European projects continue in Scandinavia and Germany. Japan and Vietnam aim for a combined ~25,000 t/year outside China. Australia (e.g. ASM) is scaling metallization and magnet production. Bottlenecks: workforce, CAPEX and China’s dominance in processing – full independence will take years.
In light of these challenges, we accept pre-orders to maintain proper magnet sizes in stock. This ensures availability even during supply disruptions – contact us to discuss details.
Source:
Tags:
poniedziałek 2025-09-22T10:00:00