GreenergyDaily

Aug. 15, 2025

China is warning western companies against stockpiling rare earths or risk even greater shortages, as Beijing tightly controls supplies of the metals vital to electric vehicles and other civilian and defence sectors, the Financial Times reported today.

China has told foreign companies not to hoard rare earths and their products, which are mostly magnets used in electric motors and other critical tech, as fears about Beijing’s export curbs drive up demand, according to two people familiar with the matter.

“Beijing is telling companies they cannot go out and build huge inventories in rare earths, or they will face shortages,” one of the people said.

The other person familiar with the matter said Chinese authorities were deliberately limiting approved export volumes to prevent foreign stockpiling. “This will be a leverage point from now on,” they said.

China dominates the production of rare earths, processing about 90 per cent of the world’s supply and making 94 per cent of permanent magnets. It has weaponised that control over the vital industry in the trade war with the US.

Beijing’s efforts to prevent companies from building up large inventories, which would give them more flexibility to respond to shortages and price fluctuations, show its determination to maintain maximum leverage in a sector, the people said.