China's Ministry of Commerce announced the restrictions on germanium and gallium material exports starting on August 1, 2023, making industries concerned about whether the control will expand to other rare earth materials. According to Reuters, China's customs data showed the country exported 8.6% more rare earth in the first eight months of 2023 from 2022.
The data also showed China's rare earth exports in August increased by 30% year-over-year. The possibility of hoarding is not ruled out.
According to United States Geological Survey (USGS) estimates, China accounted for 70% of global rare earth product production in 2022. Since the Chinese government strictly controls production, the rare earth policies will reflect if the country tends to cut the production volume significantly or even ban exports.
Nikkei Asia reported that China's Ministry of Industry and Information Technology and the Ministry of Natural Resources recently adjusted the rare earth metal production quota for 2023, increasing the volume by 14% from 2022 to 240,000 tonnes.
However, China did not increase quotas for elements like dysprosium, used in magnets for EV motors, according to Nikkei Asia. The quota for medium and heavy rare earths also remained under 20,000 tonnes. Medium and heavy rare earths are essential materials for high-tech products and weapons.
As the world's largest EV producer, China is trying to boost domestic sales and scale up in foreign markets. Therefore, the country would require more rare earth supplies. Nikkei Asia reported that the rise of the quota represented another continuous rare earth production growth since 2018.
