China's exports of rare-earth products declined by 28% in December 2025 compared to the previous month, driven by geopolitical friction with Japan over maritime boundaries. The drop affects critical materials used in high-tech manufacturing and clean energy sectors.
- China’s rare-earth exports dropped 28% in December 2025 month-on-month.
- Light rare-earth element (LREE) shipments declined 31%, affecting EV and clean energy supply chains.
- Neodymium oxide prices rose 12% in January 2026 due to supply concerns.
- Tesla (TSLA) and Nvidia (NVDA) face potential production delays if alternative sources aren’t secured.
- MXI ETF volume fell 7.3% amid rising supply chain anxiety.
- Global demand for REE is projected to grow at 9.1% CAGR through 2030.
China’s rare-earth product exports fell sharply in December 2025, registering a 28% month-on-month decline, according to official trade data. The reduction coincided with heightened diplomatic tensions between Beijing and Tokyo over disputed maritime zones in the East China Sea, prompting a reassessment of export policies. The decline particularly impacted light rare-earth elements (LREE), which are vital for magnets in electric vehicles, wind turbines, and consumer electronics. The drop in shipments has raised concerns across global supply chains, especially for technology and automotive firms reliant on stable rare-earth oxide (REE) supplies. Companies such as Tesla (TSLA) and Nvidia (NVDA), which depend on high-performance permanent magnets for EV drivetrains and data center GPUs, may face delayed production cycles if alternative sourcing is not secured. The export volume of LREE, which accounted for 64% of total rare-earth exports in 2024, fell by 31% in the same period, signaling a shift in China’s export strategy under geopolitical pressure. Market analysts note that the decline has already influenced commodity pricing, with the price of neodymium oxide rising by 12% in January 2026. Other major importers, including South Korea and Germany, are accelerating efforts to diversify supply sources, including expanding processing capacity in Australia and recycling initiatives in the EU. Meanwhile, the U.S.-listed rare-earth ETF, MXI, saw a 7.3% drop in trading volume as investors reacted to the supply uncertainty. The situation underscores the growing vulnerability of global high-tech manufacturing to geopolitical disruptions in critical mineral supply. As demand for REE continues to surge—projected to grow at a 9.1% CAGR through 2030—firms and nations are under increasing pressure to reduce dependency on a single source.