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China’s rare earth magnet exports to the US rise despite trade war threats

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Chinese producers have threatened to restrict sales to the United States but last months customs data shows sales to the US increased last month.

Chinese producers have threatened to restrict sales to the United States but last month’s customs data shows sales to the US increased last month.

Surging rare-earth production in China is presenting a new challenge to budding efforts in the US and elsewhere to undercut the Asian giant’s dominance in a market for exotic materials used in everything from smartphones to fighter jets.

China said this month it’s raising its annual mining quota for rare-earths to 132,000 tons, 10% above last year’s record high. It’s a move likely to weigh on global prices, dealing a blow to rivals including the US and Australia, countries that agreed just last week to jointly accelerate new projects in a push to diversify the supply chain.

Chinese exports of rare earth magnets to the United States rose last month, customs figures show, despite a threat to restrict supplies as part of the ongoing trade war.

China is the world’s dominant producer of rare earth magnets, which are widely used in medical devices and consumer electronics as well as defence.

It has previously threatened to restrict the rare earth supply to the United States, although no formal measures have been announced.

Shipments of rare earth magnets totaled 447 tonnes last month, according to data from the General Administration of Customs released on Sunday. That compared with 414 tonnes in June and 356 tonnes in July 2018.

Another key rare earth product for the United States is lanthanum, which is used in the oil-refining industry. Exports of lanthanum oxide stood at 966 tonnes in July, the customs data showed.

That was more than double the 433 tonnes in June and up 119.5 percent from 440 tonnes in July 2018. Exports of lanthanum carbonate, meanwhile, were at 119 tonnes, just below 120 tonnes in June and down 71.9 percent year-on-year.

China’s overall rare earth exports, which can fluctuate wildly, rose by 32.2 percent in July from the previous month to their highest level since December, according to data released on August 8.

Early in August, China’s rare earth producers, who control the lion’s share of the world’s output of the elements, said they are ready to use their dominance of the industry as a weapon in the country’s trade war with the United States.

Chinese producers said they would pass any tariffs on to customers, in a move that would almost certainly add to the cost of the magnets, motors, light-emitting diodes and hundreds of other devices, according to an industry guild that represents almost 300 miners, processors, and manufacturers.

The industry “resolutely supports the nation’s countermeasures against US import tariffs on Chinese products,” the Association of China Rare Earth Industry said. “US consumers must shoulder the costs from US-imposed tariffs.”

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