Rare Earth Prices Surge as MP Materials Halts China Shipments

MP Materials Halt Sparks Rare Earth Price Surge

Rare earth prices have surged after MP Materials halted exports to China, disrupting supply chains and driving up costs. The company had previously supplied 7% to 9% of China’s neodymium and praseodymium (NdPr) oxide—crucial inputs for EVs, wind turbines, and defense applications.

Following a U.S. government-backed agreement in July, MP Materials ceased shipments and committed to refining NdPr domestically. Washington also offered price support of $110 per kilogram, nearly double Chinese market rates. In response, China’s benchmark NdPr oxide prices jumped 40% since early July, hitting 632,000 yuan per tonne (about $88/kg)—the highest level since March 2023.

According to Adamas Intelligence, this disruption removed a “material portion” of China’s supply, leaving a major gap in the global rare earth magnet industry. MP’s decision reinforces the geopolitical importance of domestic refining and highlights the fragility of global supply chains.

China’s Controls Tighten Amid Rising Global Tensions

Meanwhile, Beijing has moved to consolidate its rare earth dominance through new regulations and export restrictions. The updated quota system now covers imported feedstock as well as domestic ore, requiring producers to report mineral flows monthly. This move enhances China’s grip on global magnet material supply and strengthens its control over prices and availability.

The U.S.-China rare earth battle escalated further after former President Donald Trump threatened 200% tariffs on rare earth-related products unless China resumes magnet exports. China’s April export controls led to an immediate drop in permanent magnet shipments to the U.S.—down 58% in April and 81% in May, per South China Morning Post data.

Meanwhile, Chinese demand is rebounding. The country has entered peak production season for electric vehicles, wind turbines, and electronics, according to Benchmark Mineral Intelligence. With demand for NdPr expected to grow 10% this year while Chinese output increases only 5%, a supply crunch appears likely.

SuperMetalPrice Commentary:

MP Materials’ halt in China-bound shipments marks a turning point in rare earth geopolitics. As prices hit two-year highs, downstream sectors face renewed cost pressures. Beijing’s regulatory tightening, paired with U.S. trade threats, could accelerate reshoring efforts and new capacity investments outside China. However, with China still dominating rare earth refining and global demand rising fast, market volatility will likely persist through 2026.