China's rare-earth exports surge 158% in June: What's the reason?
What's the story
China's exports of rare-earth magnets surged by nearly 158% in June, following the country's decision to relax some export restrictions on these vital industrial inputs. The move came after a deal with the United States. The total export volume stood at 3,188 tons last month, much higher than the May's figure of 1,238 tons.
Trade dynamics
Shipments to US jump from 46 tons in May
Shipments to the US alone rose to 353 tons in June, a massive jump from just 46 tons in May. However, total shipments remain far lower than pre-April levels when Beijing imposed export restrictions. The Chinese government had restricted sales of seven of 17 rare earth elements, including those used for high-tech manufacturing of electric vehicles, smartphones, and fighter jets.
Diplomatic impact
Trump announced that China had agreed to ease tensions
The restrictions had threatened major disruptions to US industries and prompted President Donald Trump to agree to a trade truce. After negotiators struck an agreement in June, Trump announced that China had agreed to ease tensions and increase exports of rare earths and magnets. However, US Treasury Secretary Scott Bessent admitted on July 1 that while flows of magnets from China had increased, they were still not fast enough.
Market shift
Exports still below last year's levels
Despite the surge in June, China's rare-earth magnet exports are still much below last year's levels. Monthly shipments averaged 4.8 million kilograms last year. This has led some Western companies to look for long-term alternatives elsewhere.