China saw its exports of rare earth magnets drop by 6.1% in September from a month earlier, even before Beijing imposed stricter rules on exports of the key materials for technology and defense systems.
Last month, Chinese exports of rare earth magnets fell from the seven-month high reached in August, according to official Chinese customs data cited by Reuters.
The drop in September exports could deepen going forward, after China earlier in October expanded the list of rare earth elements under export control and added curbs on manufactured products that have used Chinese refining and magnet-making technology, in a move that further tightens China’s grip on the critical materials market.
The export restrictions on technology took immediate effect, while the extended control over exports of rare earth elements will come into effect on December 1. China’s Commerce Ministry has said that companies connected to foreign militaries or placed on export-control or watch lists would be denied permits. But Beijing has insisted that it would approve licenses for exports of magnets intended for civilian use.
“The sharp swings in rare earth magnet exports show that China knows it holds a key card in international trade talks,” Chim Lee, senior analyst at the Economist Intelligence Unit, told Reuters.
China’s new export restrictions and the drop in September rare earth exports come as the U.S. and China continue trade negotiations, while there is a possibility that U.S. President Donald Trump could meet with Chinese leader Xi Jinping at a summit of Asia-Pacific leaders in South Korea later this month.
Despite major deals and government support in the West for building domestic supply chains, China has raised its market share in critical minerals over the past few years, the International Energy Agency (IEA) warned earlier this year in its annual report.
China dominates refining for 19 of the 20 minerals the agency has analyzed, holding an average market share of around 70%.
By Tsvetana Paraskova for Oilprice.com
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