Rare Earth crisis deepens: China’s shipments sink to five-year low; down 74% YoY in May

China’s overseas shipments of rare earth magnets fell sharply in May, dropping to their lowest level in more than five years as export restrictions and heightened customs scrutiny disrupted global supply chains.According to data from the General Administration of Customs, China exported just 1,238 metric tons of rare earth permanent magnets last month, a 52.9% drop from April and the weakest monthly figure since February 2020. Compared to May 2024, shipments were down 74% year-on-year.April’s exports had already halved from March, marking a sustained downward trend that has unsettled industries worldwide, including automotive, aerospace, semiconductors, and military equipment manufacturing, reported Reuters.China, which produces more than 90% of the world’s rare earth magnets, began enforcing restrictions in early April on the export of seven types of medium-to-heavy rare earth products and certain magnets. While the move was intended to assert control over strategic resources, it has created confusion at customs, especially since a single customs code covers a wide range of magnet chemistries.Sources familiar with the situation told Reuters that Chinese customs officials have become increasingly cautious in processing rare earth shipments, particularly those used in appliances and consumer electronics. They added that officials are unsure how to interpret and apply Beijing’s export control rules.China’s ministry of commerce announced Thursday that “a certain number” of export license applications had been approved, though no details were provided. Meanwhile, Chinese producers such as JL MAG Rare-Earth and Innuovo Technology have confirmed recently that they secured limited export licenses for some clients.Despite efforts to ease bottlenecks, overall exports of rare earth magnets for the January-May period stood at 19,132 metric tons, down 14.5% from the same period in 2024, the lowest five-month total since 2021.Earlier this month, Beijing agreed to expedite the export approval process as part of a broader effort to de-escalate trade tensions with the US. However, industry insiders say customs delays and regulatory ambiguity continue to hinder shipments.

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