Rare Earth Minerals Supply Virtually Cut Off By China

It’s no wonder automakers are nervous about rare earth minerals these days, because the supply has been severely pinched. Considering the materials are used in many critical parts on modern digitized vehicles, the situation is feeling increasingly like the whole chips shortage during the covid shutdowns a few years ago.

It might be the end of the road for Maserati.

A new report from Bloomberg puts some numbers instead of just emotion and general talk in front of us. Because China controls around 90 percent of the rare earth products on the market, it has considerable sway on the market.

In April, exports of rare earth minerals from China dropped by about 50 percent, with all foreign nations feeling the pinch. Then in May, China halved the amount it exports again, making it a quarter of the original amount.

The last time China exported so little was in February 2020 and before that, all the way back in 2015. One might think this is a five-year thing, but we believe that’s just coincidence.

But in May, rare earth exports to the US were down by 92 percent versus May 2024. This is why Ford says it has a day-to-day supply of the stuff and has idled factories. If this continues, expect to see the auto industry fall into more of a slumber.

Obviously, China is trying to show its power and possibly hurt industry in the US as well as other Western countries. It’s self-evident we need to build a rare earth supply chain domestically. Even if China restores the flow to where it was in March, it could yet again pinch it off for any or no reason later.

The international dispute over rare earth minerals started back in early April, so it’s been over two months of the flow getting pinched to almost nothing.

However, in early June, after meeting with President Xi, President Trump declared that the situation with rear earth minerals had been fixed.

Image via Ford