China's Rare Earth Magnet Exports To EU Surge As Europe Accelerates Local Production
Views: 5 Author: Site Editor Publish Time: 2025-09-26 Origin: Site
On September 23, 2025, Chinese customs data revealed that exports of rare earth magnets to the EU surged to 2,582 tons in August, up 21% month-on-month—4.4 times the volume exported to the U.S. (590 tons), highlighting the EU’s deep reliance on Chinese supply chains. Simultaneously, Europe is accelerating its domestic supply chain: Canada’s Neo Performance Materials inaugurated Europe’s first rare earth magnet plant in Estonia on September 19, with an initial annual capacity of 2,000 tons (10% of EU demand), aiming to expand to 5,000 tons. The project received €18.7 million in EU funding and has secured long-term supply agreements with automakers including Bosch and Schaeffler, sourcing raw materials from Australia.
Meanwhile, Chinese firms are expanding overseas to mitigate trade risks: Longci Technology (300835.SZ) announced a ¥210 million investment on September 15 for its Phase II project in Vietnam, adding 10,000 tons of ferrite wet-pressed magnet arcs and supporting 25,000 tons of pre-sintered materials capacity, with a 36-month construction period. Its Vietnamese subsidiary generated ¥90.64 million in revenue and ¥29.49 million in net profit in H1 2025, with products facing supply shortages due to scarce overseas capacity.
Impact Analysis:
Contradictory Trade Dynamics
EU dependence vs. autonomy: While surging Chinese exports reflect short-term gaps, Neo’s output and the EU’s Critical Raw Materials Act (targeting 40% local processing by 2030) will gradually reduce reliance on China
Chinese "going global" strategy: Longci’s Vietnam base avoids China’s export controls (45-day approval for heavy rare earths) and U.S. tariffs, with Phase II set to cover 20% of its global capacity
Price and Capacity Divergence
Primary magnet prices under pressure: Increased Chinese exports may ease supply tightness, but EU recycled magnet policies drive premiums (recycled dysprosium premiums hit 41% per LME, while Western production costs remain high (e.g., U.S. MP Materials’ costs exceed China’s by 50%, intensifying market stratification.
Capacity race intensifies: Beyond Neo’s plant, U.S.-based MP Materials secured $400 million from the Department of Defense, and Australia’s Lynas achieved breakthroughs in heavy rare earth refining, forming a G7-led "second supply chain".
