Dysprosium and Terbium Price Impact on Manufacturing

China’s latest move to tighten export controls on key rare earths including dysprosium, terbium, samarium, and scandium is exactly the kind of slow-boil crisis that’s been years in the making. Now it's here, and it’s putting serious pressure on US supply chains, especially across defense and clean-tech sectors. We’re not talking hypotheticals anymore. China controls 99% of the world’s processed dysprosium a heavy rare earth critical for permanent magnets used in everything from electric vehicles and wind turbines to submarine propulsion and advanced missile systems. As of April 4, they’ve added another seven elements to their export control list, on top of the germanium and gallium restrictions last year. It’s a clear escalation in what’s becoming a high-stakes game of geopolitical chess. The US produces some light rare earths domestically MP Materials is scaling up fast at Mountain Pass and their new Fort Worth facility but for medium and heavy REEs, we’re still largely at the mercy of China’s licensing regime. And now that includes asking permission to export minerals essential to modern industry. As USA Rare Earth, Inc. (Nasdaq: USAR)’s CEO put it: “It’s an embarrassing situation.” The irony is we’ve seen this coming for years. The strategic risk of relying on a single supplier for critical inputs isn’t new it’s just that now the consequences are showing up in real time. The US has stockpiles and contingency plans, sure, but when 75%+ of global mined heavy rare earths are either produced in or processed by China, “Plan B” is going to feel the squeeze too. Especially as Myanmar, one of the few alternative suppliers, continues to experience production volatility. So what happens next? We’ll probably see price volatility spike, especially for dysprosium and terbium. We may even see an acceleration of domestic supply chain investment not just mining, but magnet manufacturing, recycling, and substitution technologies. But all that takes time and coordination. And right now, China still has the upper hand. This isn’t about rare earths in isolation. It’s about chokepoints, leverage, and how critical minerals have become the new oil strategic assets with global reach and geopolitical weight. If there was ever a moment for Western governments and industry to align on long-term supply chain security, it’s now. And it’s already late. Sources: Reuters: China hits back at US tariffs with rare earth export controls. https://lnkd.in/gkE3zdP2 Reuters: Trump's strategy threatens critical mineral supplies for clean power. https://lnkd.in/gdiW4dMf Wikipedia: Mountain Pass Rare Earth Mine. https://lnkd.in/gBHsh7vb S&P

🔋 𝗪𝗵𝘆 𝗮𝗿𝗲 𝗚𝗲𝗿𝗺𝗮𝗻 𝗘𝗠𝗦 𝗽𝗿𝗼𝘃𝗶𝗱𝗲𝗿𝘀 𝘀𝘁𝗼𝗰𝗸𝗽𝗶𝗹𝗶𝗻𝗴 𝟭𝟮 𝗺𝗼𝗻𝘁𝗵𝘀 𝘄𝗼𝗿𝘁𝗵 𝗼𝗳 𝗿𝗮𝗿𝗲 𝗲𝗮𝗿𝘁𝗵𝘀? The answer is critical and urgent. 🚨 𝗖𝗵𝗶𝗻𝗮 𝗵𝗮𝘀 𝘁𝗶𝗴𝗵𝘁𝗲𝗻𝗲𝗱 𝗰𝗼𝗻𝘁𝗿𝗼𝗹𝘀 on key rare earth exports: Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, Yttrium. 🏭 𝗧𝗵𝗲𝘀𝗲 𝗺𝗲𝘁𝗮𝗹𝘀 𝗮𝗿𝗲 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗳𝗼𝗿: → Electric motors → Wind turbines → Medical tech → Military systems ⏳ 𝗧𝗵𝗲 𝗶𝗺𝗽𝗮𝗰𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗲𝘅𝗽𝗼𝗿𝘁 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀: → Extended lead times (45+ days just for licensing!) → Significant price spikes → Supply chain disruptions—even finished magnets and oxides face chaos! 📊 𝗗𝗶𝗱 𝘆𝗼𝘂 𝗸𝗻𝗼𝘄? Germany imports 65%+ of these rare earths from China. For Neodymium and Samarium, it's nearly 100%! 🇨🇳 ⚠️ 𝗧𝗵𝗲 𝗿𝗶𝘀𝗸𝘀 𝗮𝗿𝗲 𝗰𝗹𝗲𝗮𝗿: → Production delays → Rising costs → Quality issues (reliable substitutes? Not always!) 💡 How can electronics manufacturers respond? 1) Stockpile smartly: 12-month inventories are now becoming the norm (yes, a whole year!) 2) Diversify supply chains: Look to Australia, the US, and EU. 3) Innovate in design: Less reliance on rare earths, more sustainable alternatives. 4) Boost quality control: Rigorous checks, every batch, every time 5) Collaborate strategically: Recycling, local processing, strategic alliances 🤔 How are you approaching this problem?

China’s leverage over the rare earths market is no longer theoretical - it's leading to aggressive premiums across the rest of the world. Nearly a year after export restrictions were introduced, the divergence between China and international markets continues to widen, with no sign of easing. For HREEs, that gap is now extreme: - Dysprosium (Dy) oxide prices on a CIF North America basis were 4.4x higher than EXW China prices in 2025 - European terbium (Tb) prices are showing a similar premium - New Benchmark data suggests this differential could almost double by 2027, with N.A. Dy prices reaching ~8.3x China levels This is no longer a short-term dislocation. It is structural bifurcation. As geopolitical uncertainty deepens and magnet producers move to secure critical inputs, pricing fragmentation is becoming embedded in the market. The implications are clear: ▶️ Higher input costs for ex-China magnet supply chains = ▶️ Reduced competitiveness for downstream manufacturing in North America, Europe and Japan = ▶️ Increased urgency for investment in alternative supplies As Benchmark Mineral Intelligence's George I. notes: “This raises input costs for magnet supply chains outside China, weakens the competitiveness of downstream manufacturing in regions such as North America, Europe and Japan, and strengthens the case for policy support, strategic stockpiling and ex-China supply chain investment.” The question now is not whether this gap persists but how wide it becomes, and how quickly industry and policymakers respond. Read the full analysis ➡️ https://lnkd.in/gWZZpcM5