China’s Rare Earth Magnet Exports Plunge Amid Tighter Export Controls

China's exports of rare earth magnets dropped sharply in May, falling 52.9% from April to just 1,238 metric tons—the lowest monthly level since February 2020, according to Chinese customs data. Year-on-year, the decline was even steeper at 74%. The sharp contraction comes as Beijing tightens export controls on critical rare earth elements, vital to sectors like electric vehicles, aerospace, semiconductors, and defense.

The drop follows new restrictions imposed in April on the export of seven medium-to-heavy rare earths and certain magnet products. Although China's commerce ministry stated that "a certain number" of export licenses had been approved, it provided no further details. Industry insiders say Chinese customs have grown more cautious, with some rare earth shipments delayed due to confusion over product classifications. Particularly affected are low-performance magnets used in consumer electronics, which fall under a single customs code despite differing compositions.

China dominates the global rare earth magnet market, producing over 90% of supply. The new restrictions have rattled international supply chains, already under strain from ongoing trade tensions between China and the U.S. While both nations have recently pledged to ease trade frictions, China has yet to fully streamline its export approval process.

Chinese magnet manufacturers JL MAG Rare-Earth and Innuovo Technology recently reported obtaining limited export licenses for select clients. However, total exports for January to May still dropped 14.5% year-on-year to 19,132 tons—the lowest for the period since 2021.

With rising global demand for rare earth magnets in clean energy and defense applications, prolonged export slowdowns could significantly impact industries reliant on Chinese supply. Stakeholders are closely watching how swiftly Beijing can clarify its policy and restore smoother export flows.