SMM News on June 5: The export controls implemented on April 2025 for seven categories of medium-heavy rare earths, including samarium, gadolinium, and terbium, have triggered significant disruptions in the international supply chain: Prices of medium-heavy rare earths in the European market have rapidly surged to 2-3 times their pre-control levels. US companies such as Ford Motor and Tesla have been forced to suspend some production lines due to the disruption in the supply of critical rare earths, and the Indian automotive industry is also facing the risk of shutdown. Although China has recently provided short-term relief to the international rare earth market by approving some export licenses, strict restrictions remain in place for core heavy rare earth categories.
On June 16, the General Administration of Customs issued an announcement regarding matters related to customs inquiries on the export control of dual-use items. It requires customs authorities to implement inquiry procedures for suspected unlicensed export shipments of controlled items. Enterprises are required to submit supporting documents such as contracts and technical reports within seven working days, during which the goods will not be released. Some industry participants believe that this measure not only blocks gray-market export channels but also extends the focus of review to the identification of the dual-use nature of items, providing more operational institutional support for control measures.
According to an SMM survey, most industry participants believe that China will continue to maintain export controls on dual-use items, ensuring reasonable demand in the civilian sector while strictly restricting sensitive exports related to national defense security. However, many also believe that, given China's dominance of 90% of the global refined capacity, its significant restrictions on rare earth exports will inevitably accelerate the global supply-demand mismatch of rare earths.
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