China rare earth firms halt some US shipments over geopolitical fears, sources say

• Chinese suppliers began halting shipments in early August after China sanctioned the Responsible Business Alliance, with companies fearing punishment for complying with Western due diligence frameworks
• Yttrium exports to the U.S. are only about half of 2024 levels, with some U.S. companies waiting over six months for mineral licenses despite China shipping larger volumes to other countries
• Japan faces even stricter restrictions, with China exporting zero terbium (down from 20 tons last year), 65% less gallium, and 98% less yttrium between January and August

Summary: Chinese Rare Earth Export Disruptions Threaten U.S. Supply Chain

Key Development: Multiple Chinese rare earth suppliers are refusing shipments to U.S. companies despite holding valid export licenses, citing fears of repercussions from Beijing. The issue has escalated ahead of President Xi Jinping's September 24 visit to Washington.

Timeline and Triggers:

• Export disruptions intensified in early August following China's sanctions on the Responsible Business Alliance (RBA), a U.S. supply chain monitor
• China initially imposed rare earth export controls in April 2025
• Some suppliers have been declining shipments for months to avoid geopolitical entanglement

Critical Impacts:

• Prices for materials with military applications—including yttrium, terbium, and gallium—remain near record highs with tight supply
• Yttrium exports to the U.S. are running at approximately 50% of 2024 levels
• Some U.S. companies have waited over six months for mineral licenses
• Affected sectors include defense, semiconductors, aerospace, energy, and medical devices

Regional Scope: Export restrictions extend beyond the U.S. License approvals for Indian and Japanese buyers are even more limited. Japan saw terbium exports drop to zero (from 20 tons), gallium down 65%, and yttrium down 98% year-over-year.

Geopolitical Context: The disruption represents China's response to U.S. Federal Communications Commission restrictions targeting Chinese electronics, drones, and other technology. Both sides claim violations of the "Busan agreement" on rare earth flows.

Market Outlook: Analysts expect Beijing may temporarily ease controls around the summit to deflate U.S. allegations. Recent data shows some license approvals increasing, with July recording the second-highest monthly yttrium shipment since January 2025.