A handful of Chinese rare earth suppliers have stopped shipping to U.S. buyers over fears of Beijing's retaliation, three sources told Reuters, weeks before President Xi Jinping's September 24 Washington visit. Prices for military- and chip-grade materials like yttrium and tungsten remain near record highs even as broader rare earth exports have partly recovered.
Suppliers pull back over sanctions fallout
Some Chinese rare earth suppliers are declining to ship to the U.S. for fear of repercussions from Beijing, three sources said. The refusals underscore how access to the materials remains unresolved weeks before Xi's planned visit to Washington.
A handful of suppliers have refused to ship rare earths to U.S. companies since early August, when China sanctioned the Responsible Business Alliance, a U.S. supply-chain monitor, according to a source with direct knowledge. The companies feared punishment from Beijing for complying with the due-diligence framework tied to that group. Other Chinese firms had already halted U.S. shipments in recent months to avoid getting entangled in the dispute, two further sources said, with one citing four cases where material was withheld over fears it could be resold to banned users.
Tight supply persists despite a partial rebound
Exports of many rare earths and related magnets have rebounded since China first imposed restrictions in April 2025. But prices for materials with military or chipmaking uses, including yttrium, indium phosphide and tungsten, remain near record highs amid tight supply. Medical device and energy firms have also faced licence delays.
Yttrium exports to the U.S. have risen this year but are still only about half 2024 levels, despite large shipments elsewhere, Chinese customs data shows. Some U.S. companies have waited more than six months for mineral licences, two sources said. Japanese buyers have fared worse still: Chinese suppliers are largely refraining from shipping to Japanese firms, and China sent no terbium to Japan between January and August, down from 20 tons over the same period last year, while gallium shipments fell 65% and yttrium fell 98%.
Both sides trade blame ahead of the summit
Beijing said its August sanctions on the RBA and other U.S. auditing firms responded to a series of FCC restrictions since December targeting Chinese electronics testing labs, drones, routers, submarine cables, robotics equipment and power inverters. When U.S. officials raised the rare earths issue in meetings, Chinese officials countered that the FCC actions violated the Busan truce, one source said.
Still, the picture is not uniformly worse: after two months without yttrium exports, China sent 27 tons of the material to the U.S. in July, its second-highest monthly shipment since January 2025, and several U.S. firms report recently receiving multiple licences after long waits. The European Chamber of Commerce in China said: "While processes have been streamlined, our member companies still face issues with implementation."
Source: Investing.com
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