China’s rare earth exports recover ahead of US trade talks

Chinese exports of rare earths, a group of 17 minerals at the center of a trade dispute with Washington, rose 23% in May from the previous month, according to customs data on Monday.The shipments of 5,865 tons were still below last year’s level, although the jump last month helped push the year-to-date figure 2.3% higher to 24,827 tons. The data doesn’t cover rare earth products, which include high-value magnets for electric motors and hard-disk drives.
Rare earths will top the agenda later in the day, when negotiators meet in London as the world’s two biggest economies seek to defuse tensions. The list of grievances includes China’s export controls on rare earth minerals and magnets, which are used widely in high-tech and defense manufacturing.
The customs figures on Monday offer an incomplete picture of the impact of China’s curbs, which only apply to worldwide sales of seven of the elements. Those were imposed on April 4 in retaliation to punitive tariffs levied on Chinese goods by President Donald Trump. China accounts for almost 70% of the world’s production of rare earths.The May data for rare earth products is due to be released on June 18. The breakdown of export destinations should be available by June 20.

China appeared to loosen its curbs last month, after an announcement on May 12 that the two countries had agreed to lower tariffs and other barriers to trade. The US subsequently accused Beijing of stalling on sales, although delays may have been due to long lead times in China’s permitting system. European trade officials and carmakers have also sounded the alarm on disruption to supplies from China.

On Saturday, the Chinese government said it had granted approvals for some rare earth exports, without specifying which countries or industries were covered, in a move that could help smooth Monday’s talks with the US.

Customs data for April showed rare earth and product sales to the US dropping 37% from March to about 1,700 tons. Within that, rare earth magnet sales fell more steeply by 58% to 246 tons. Magnet sales to the whole world were 51% lower at around 2,600 tons.

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