Companies are paying premiums for rare earth magnets made outside of China

From Yahoo Finance: 2025-07-01 06:32:00

Rahim Suleman marketed rare earth magnets from his Estonian plant outside of China, but stopped after China imposed restrictions on magnets used in EVs and wind turbines. Companies are now scrambling to secure deals for magnets made outside of China, willing to pay premiums to ensure supply. Neo Performance Materials launched magnet production in Estonia, with high demand from customers.

Despite some rare earth magnets from China flowing again, concerns about future shortages persist. Neo’s Estonia plant is producing magnets, with customers willing to pay $10 to $30 per kg premium. NovaTech customers in Korea are prepared to pay 15% to 20% more for magnets made in Vietnam. NovaTech is investing in a plant in Vietnam to make magnets using locally processed rare earths.

Britain’s Less Common Metals is seeing increased demand post-China export restrictions. The industry faces challenges in building up production outside of China, which accounts for 90% of global magnet supply. Automakers are willing to pay more for ex-China supplies, but excessive premiums could impact margins. Companies are working to find a balance in pricing for rare earths and magnets.

Some automakers have developed EVs without rare earths or reduced their usage. However, analysts say eliminating rare earths in vehicles is not feasible in the medium term. Industry players are working together to create a responsible supply of rare earths outside of China, understanding the need for premiums but also the risk of demand destruction.



Read more at Yahoo Finance: Rare earth magnet users jolted into paying premium prices for ex-China supply