Manufacturers must submit numerous details about clients and trading volumes.
China has introduced a tracking system for rare earth magnets, requiring manufacturers to submit additional client information, trading volumes, and other details, according to a Reuters report citing sources familiar with the matter. The measure builds upon existing export restrictions imposed in April on seven of the 17 rare earth elements: dysprosium, terbium, yttrium, gadolinium, samarium, lutetium, and scandium, as well as their various compounds, including their use in magnets. In February, China proposed a traceability system for rare earth products, but it has yet to be formally implemented. The plan had also briefly mentioned export licenses before they were eventually enacted through a different measure two months later.
Customs Code Causes Confusion
Although the measures do not constitute an outright ban, exporters must obtain licenses to ship restricted materials abroad. The licensing process is estimated to take approximately 45 working days. In addition, the most common type of rare earth magnets, neodymium-iron-boron (NdFeB) magnets, often include small amounts of dysprosium and terbium to enhance their performance and thermal stability. While neodymium is not subject to licensing requirements, customs authorities have struggled to determine which of them contain restricted materials, as they only use a single classification code for all rare earth magnets, regardless of their chemical composition.
Importers Voice Concerns
The delay in exports has already prompted some reactions abroad: The European Union has expressed concern over the impact of China’s rare earth export measures, citing risks to its industrial base due to heavy reliance on Chinese supply. The automotive sector, in particular, has echoed these concerns, reporting early disruptions in parts of its supply chain.
Photo: iStock/Michael Ien Cohen