China's Rare Earth Exports Decline in Volume but Surge in Value, with August Value Soaring 51% Month-on-Month, Securing Global Pricing Authority

In August 2025, China's rare earth exports exhibited a pronounced trend of “decreased volume but increased value,” with export value surging 51% month-on-month to reach $55 million for the single month. This shift signifies a profound transformation in China's rare earth strategy—moving beyond simple “resource exportation” toward “value control” and “rule-setting.” Within the global rare earth market, China is quietly reshaping pricing rules by leveraging its irreplaceable position in the industrial chain and technological advantages. The export restrictions on medium-to-heavy rare earths implemented in April 2025 acted like a pebble dropped into calm waters, triggering a chain reaction across global markets. European dysprosium prices surged by 300% within just four weeks of the policy announcement, while terbium oxide prices jumped from $965 per kilogram to $3,000. Behind these figures lies China's strategic ascent from passive supplier to active controller of global rare earth pricing power. China's rare earth policy transformation began with export controls on medium-to-heavy rare earths implemented in April 2025. This policy is not merely an export restriction but a sophisticated management system. The new policy incorporates imported ores (particularly those from Myanmar) into total volume controls and establishes a full-process traceability system. This means all rare earth raw materials entering China must be incorporated into the national quota system. Every kilogram of rare earth oxides now carries a “digital ID,” enabling full traceability from mining to final products. Quota management has also become a key tool. China's rare earth export quota for 2025 was reduced to 58,000 metric tons, a significant decrease from previous years. This tightened quota policy created a tight supply-demand balance, laying the groundwork for price increases. The combined effect of these policies has been immediate. In the European market, dysprosium prices surged from approximately $300 per kilogram in early April to $850 per kilogram on May 1, more than doubling. Terbium prices jumped from $965 per kilogram to $3,000 per kilogram, a rise exceeding 210%. China's adjustment to its rare earth policy has triggered a strong reaction in global markets, highlighting the severe imbalance in global rare earth supply and demand. On the international market, rare earth prices have surged dramatically. European dysprosium prices reached $850 per kilogram (approximately ¥6.09 million per ton), while domestic prices stood at just ¥2.03 million per ton—a threefold difference. European terbium prices hit $3,000 per kilogram (approximately ¥21.51 million per ton), 2.4 times the domestic price of ¥8.79 million per ton. This substantial price disparity created arbitrage opportunities. In July 2025, a Japanese electronics company procured domestic praseodymium-neodymium oxide at a premium of $680 per kilogram (16.7% above domestic rates), directly driving domestic quotations up by 500,000 yuan per ton. Overseas buyers engaged in panic buying and stockpiling. China's export controls on medium-to-heavy rare earths, implemented since April 2025, caused overseas prices to command substantial premiums over domestic rates, further fueling upward price expectations. Faced with China's rare earth policy adjustments, countries have responded differently but generally find themselves in a predicament. The United States urgently reactivated the Mountain Pass mine, achieving a rare earth output of 45,000 metric tons in 2024—accounting for 11.5% of global production. The U.S. Department of Defense also signed an agreement with MP Materials, the world's largest rare earth miner, setting a minimum procurement price of $110 per kilogram (approximately RMB 785 per kilogram) for praseodymium-neodymium in 2025—significantly higher than the domestic quote of RMB 685 per kilogram. Australia's Lynas Corporation became the first company outside China to achieve commercial-scale production of heavy rare earths, supplying 12% of the global market. Vietnam's 2024 rare earth output reached 31,000 tons, accounting for 7.9% of global production. The EU and Japan attempted to form a “de-Chinaization” rare earth supply chain alliance but were stymied by the critical flaw of insufficient scale. Japan's Sumitomo Metal Industries operates a small separation plant independently, incurring costs 60% higher than China's. The EU's “European Rare Earths Alliance” plans capacity at just one-fifth of China's, yet requires investments exceeding 10 billion euros. These endeavors face formidable challenges. The West lacks rare earth refining technology, grapples with high environmental costs, and suffers from insufficient economies of scale, making it difficult to compete with China. The future trajectory of rare earth prices has entered a sensitive period of market dynamics, facing multiple factors in the medium to long term. In the short term, if Myanmar's ore shipments remain suspended, neodymium oxide could surge to 700,000 yuan per ton. Should the planned 3,000-ton reserve purchase materialize, market liquidity would be completely depleted. Dysprosium oxide prices may briefly exceed 1.65 million yuan per ton, while dysprosium metal could challenge the 2.1 million yuan per ton threshold. Medium to long-term challenges stem from dual pressures of technological substitution and circular economy initiatives: Sumitomo Metal Industries' iron-based magnets achieve 80% of neodymium-iron-boron performance, with mass production by 2026 potentially reducing demand by 20%. EU legislation mandates over 50% rare earth recycling rates by 2030. However, emerging demand continues to expand. Tesla's million-unit production capacity will consume 25% of global neodymium output, potentially widening the supply gap to 1,525 tons. Long-term demand support comes from humanoid robots (requiring over 2kg per unit) and the low-altitude economy (drones/eVTOL). The future market landscape will grow increasingly complex. China will continue to safeguard its interests while promoting healthy, orderly rare earth trade through enhanced cooperation and communication with other nations.