Rare Earths Market Outlook: Supply Chain Scramble, Geopolitics, and New Tech Efforts
The global rare earths market is entering one of its most turbulent phases in decades. Heavy rare earth shortages, China’s sustained dominance in refining, escalating geopolitical controls, and a surge of U.S.-backed investment in alternative processing technologies are reshaping the strategic landscape. With demand for high-performance magnets in electric vehicles, defense systems, and consumer electronics climbing sharply, governments and companies are racing to secure reliable supply.
The West’s Scramble for Heavy Rare Earths
Heavy rare earth elements (HREEs) such as dysprosium and terbium remain the tightest bottleneck in the supply chain. These metals enable magnets to maintain strength at high temperatures—critical for EV motors, drones, wind turbines, and fighter jet components. But they are scarce outside China.
According to Reuters, the United States and its allies may still rely on China for 91% of their heavy rare earth needs by 2030, down only marginally from today’s levels (Reuters). Even as MP Materials boosts output of light rare earth elements at its Mountain Pass mine by 51% last quarter, the deposit contains only trace amounts of heavy rare earths.
With China imposing—and sometimes suspending—export restrictions on heavy rare earths, prices for dysprosium outside China have surged. In Rotterdam, dysprosium oxide recently traded at more than triple domestic Chinese prices, a reflection of both scarcity and geopolitical risk.
The West is now aggressively sourcing potential suppliers in Brazil, Malaysia, Africa, and through recycling partnerships such as Apple’s agreement to provide recycled materials containing HREEs to MP Materials.
China’s Dominance in Processing and Geopolitical Leverage
China’s control of rare earth refining remains the industry’s central choke point. While rare earth ores are not themselves rare, the refining process is costly, technically complex, and environmentally challenging. This has allowed China to cement a near-monopoly: roughly 90% of global refining capacity is located there, according to the CSIS analysis cited by NPR (NPR).
In 2025, Beijing introduced sweeping export controls requiring licenses to export products containing even trace amounts of Chinese-sourced rare earths. These measures triggered global alarm. While China subsequently agreed to suspend parts of the restrictions for one year as part of a de-escalation with Washington, the regulatory uncertainty has forced manufacturers to reassess their supply chain dependence.