China signaled it may ease some rare earth supply concerns raised by the United States, but Beijing’s broader export control regime on critical minerals appears set to remain in place. The latest agreement between Washington and Beijing stops short of removing restrictions that have disrupted US aerospace, semiconductor, and advanced manufacturing supply chains.
The White House said China agreed to address shortages involving key critical minerals and rare earth materials including yttrium, scandium, and indium. However, the statement did not include any commitment to fully remove export controls introduced by Beijing in 2025 following US tariff measures.
China’s Ministry of Commerce also avoided mentioning rare earths in its official summary of the summit, reinforcing expectations that export licensing and technology controls will remain a long-term feature of global critical mineral trade.
Rare Earth Restrictions Continue to Pressure US Industry
China remains the dominant global supplier of rare earth processing and refining capacity. The country also controls much of the world’s rare earth separation technology and critical mineral processing infrastructure.
US companies in aerospace, semiconductor manufacturing, and defense-related sectors continue to face supply delays for materials with potential military applications. Industry groups have urged Washington to secure more stable access to critical minerals as shortages increasingly affect production planning.
Yttrium is widely used in thermal barrier coatings for aircraft engines, while scandium plays a growing role in semiconductor manufacturing and advanced alloys. Limited access to these materials has created additional pressure across high-tech manufacturing supply chains.
Although export licenses are still being approved for sectors such as automotive and consumer electronics, approvals for strategic industries remain slower and more politically sensitive.
Indium Supply Tightens as Chip Demand Grows
Indium has become an increasingly important focus in the US-China technology dispute. Beijing added indium to its export control list in February 2025, and Chinese shipments have fallen sharply since then.
Indium phosphide is a key material used in photonic semiconductors, optical communication systems, and high-speed data transmission technologies. The compound is also critical for next-generation AI data centers and future 6G network infrastructure.
Another material, indium tin oxide, is widely used in LED displays, touchscreens, and consumer electronics manufacturing.
US optical component producer Coherent is expanding production of indium phosphide-based photonic chips. The company currently holds a significant share of the global market for these components. However, analysts warn that prolonged delays in Chinese export licensing could increase raw material costs and slow capacity expansion plans.
The tightening supply environment is increasing concerns about long-term supply chain resilience for advanced semiconductor manufacturing outside China.
Market Impact
○ Impacted Metals: Yttrium oxide, scandium oxide, indium metal, indium phosphide, indium tin oxide, separated rare earth materials
○ Direction: Bullish
○ Time Horizon: Medium-term to long-term
○ Affected Industries: Semiconductors, aerospace, defense, AI data centers, optical communications, consumer electronics, advanced manufacturing
○ Related Price Reports: Rare Earth Weekly Price Report, Rare Metal Weekly Price Report
○ Watch Item: Monitor whether China extends or tightens rare earth and indium export licensing restrictions beyond the current truce period.
SuperMetalPrice Commentary:
China’s latest position confirms that export controls on critical minerals are evolving into a structural geopolitical tool rather than a temporary trade measure. The market is increasingly shifting from short-term supply disruptions toward a longer-term strategic competition over refining capacity and advanced material supply chains.
For Western manufacturers, the challenge is no longer limited to mining access. Securing downstream processing, refining technology, and stable export approvals is becoming equally important for semiconductor and aerospace production.
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