China’s Rare Earth Export Limits Shift Global Supply Chain Dynamics

Recent export restrictions by China on rare earth materials to Japanese companies have prompted changes in global supply chain practices, especially for industries relying on these critical resources.

China has started limiting the export of rare earth elements and related magnets to companies in Japan, following a dual-use export ban that affects both military and civilian sectors. This development has led to a reassessment of procurement strategies among customers who depend on these materials for manufacturing and technology applications.

As a result of these restrictions, companies outside China have begun to seek alternative sources for rare earth supplies. Lynas, which operates processing facilities in Kalgoorlie, Australia, and Malaysia, has emerged as a key supplier for these markets.

Lynas is currently recognized as the largest rare earth producer outside China and is the only commercial entity producing separated heavy rare earth oxides such as dysprosium and terbium beyond China’s borders. These materials are essential for various high-tech and industrial uses.

What the numbers show

• China’s export restrictions began in January 2026
• Lynas operates two processing facilities outside China
• Lynas produces separated heavy rare earth oxides, including dysprosium and terbium

According to company statements, the recent export controls from China have allowed Lynas to negotiate pricing for rare earths outside China based on scarcity and the need for secure supply chains. This shift has influenced the way contracts and pricing are structured for customers seeking reliable sources.

Industries affected by these changes include sectors that use rare earth magnets and materials in manufacturing, electronics, and energy technologies. The adjustments in sourcing strategies reflect a broader effort to reduce reliance on a single supplier nation for these critical inputs.

Lynas’s processing operations in Australia and Malaysia have positioned the company to respond to increased demand from customers looking for alternative suppliers. The company’s role as the only commercial producer of certain heavy rare earth oxides outside China further strengthens its position in the market.

Ongoing developments in export policies and supply chain adjustments continue to shape the rare earths market, with companies and industries monitoring changes and responding to new procurement realities.

* This article is based on publicly available information at the time of writing.