China's dominance of the rare earths industry

One of the latest flashpoints for the US-China trade relationship involves "rare earths." This term refers to a group of 17 metallic elements, including the lanthanides as well as scandium and yttrium. Owing to their unique physical and chemical properties, they are often known as the "vitamins of industry" and are critical to high-tech sectors ranging from EVs to aerospace. China recently announced that some of these minerals will be subject to more export controls, following restrictions that were announced in April.

The minerals themselves are not exactly "rare;" rather, they are found as trace elements in compounds and ores, and require refining to isolate. China has become the key global player in this sector because not only does it mine rare earths domestically; it also imports ores and compounds from around the world and dominates refining. Countries that possess rare earth deposits -- including the US -- often need to ship their ores to China for processing.

As our first chart shows, China's rare earth production has grown exponentially; competitors such as the US, Australia, and Russia trail far behind. According to USGS data, China's production of rare earth oxides (REO) surged from less than 50,000 tons in the mid-1990s to 270,000 tons in 2024, accounting for approximately 70% of the global total.

CEIC's datasets let us get into granular detail about the subsectors of China's value-added rare-earth exports and related imports. Permanent magnets (47.2% in 2024) and compounds (37.8% in 2024) lead the export categories.

On the import side, in 2024, compounds accounted for 56.8% of China's total rare earth imports, while ores comprised 41.1%. The tiny remainder (2.1%) includes categories like ferro-cerium and ferroalloys.

Looking specifically at the US-China trade relationship in this sector shows how American-mined ores cross the Pacific to China, undergo complex separation and purification processes, and return as high-end products such as magnets and catalysts. The US share of China's rare earth exports fluctuates at about 20%; magnets are historically stable versus the more volatile compounds category.

CEIC's analysis uses Harmonized System (HS) codes for global trade. The rare-earth products covered here comprise six categories: RE Ores (HS 2530.9020), RE Metal (HS 2805.30), RE Compound (HS 2846.10/90), RE Ferroalloy (HS 7202.99), Ferro-Cerium (HS 3606.90), and RE Magnets (HS 8505.1110). All trade data are based on differentiated China-US HS 8-digit commodity trade statistics sourced from our China Premium Database.

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