China’s Rare Earth Magnet Exports See Growth Amid Price Declines

Magnet

China's exports of rare earth permanent magnets have seen notable growth over the first ten months of 2023, driven by rising international demand despite a dip in prices. According to customs data, the volume of permanent magnet exports, classified under HS code 85051110, rose by 7.8% compared to the same period last year, reaching 47,778 tons between January and October.

Price Drop Stimulates Overseas Demand

While the export volume increased, the average export price for Chinese magnets experienced a significant decline, falling by 21% year-on-year. The price averaged $50,388 per ton during the first ten months of 2023, a noticeable drop from the previous year’s levels. The reduction in prices appears to have fueled an uptick in overseas demand, as lower costs incentivized international buyers to increase their orders. This came despite a slowdown in global demand for magnets in the first quarter of 2023, driven by higher initial offers and abundant inventories from previous purchases.

Key Export Markets for China

The major consumers of Chinese magnets have remained steady, with Germany, the United States, and South Korea accounting for 41% of the total export volume. These three countries represent the largest share of China's rare earth magnet exports, underscoring their importance in the global supply chain for permanent magnets.

In October 2023, China's exports of rare earth magnets amounted to 4,725 tons, representing a 3.8% decline from the previous month but a significant 21% increase from the same month in 2022. The average export price in October was $46,086 per ton, slightly down from $46,677 per ton in September and substantially lower than $57,573 per ton in October 2022. This continued price decline suggests a market correction that may stimulate further demand as companies seek to secure more competitively priced materials.

The Role of Rare Earth Magnets in the Global Economy

China’s rare earth magnets play a crucial role in various high-tech industries, including electric vehicles (EVs), wind turbines, and consumer electronics, where the demand for rare earth elements is expected to grow. As the global transition towards clean energy and electrification continues, the need for rare earths—particularly for the production of permanent magnets used in motors and generators—is set to rise.