IN Brief:
- Some licensed Chinese suppliers have declined rare earth shipments to US customers since August.
- Yttrium, indium phosphide, tungsten, gallium, and terbium remain exposed to tight supply or restricted flows.
- Formal export approvals do not remove supplier-level compliance and geopolitical risks from procurement planning.
Some Chinese rare earth suppliers are declining shipments to US customers despite holding export licences, adding a commercial constraint to the formal controls already governing critical mineral trade. People familiar with the transactions said a handful of suppliers have refused US-bound orders since early August, while others had stepped back from American business earlier to avoid exposure to geopolitical restrictions.
The refusals are significant because regulatory permission does not guarantee that a shipment will move when the supplier itself sees compliance risk in accepting the order. The immediate concern follows Chinese sanctions on the Responsible Business Alliance, a US-based supply chain organisation connected with the Responsible Minerals Initiative, whose due-diligence framework is used across mineral and manufacturing supply chains.
Some suppliers are understood to be concerned that following requirements associated with the initiative could expose them to penalties in China. Another concern is that material could later be resold to users subject to Chinese restrictions. The total number of suppliers declining US business has not been established, so the development does not amount to a blanket halt in Chinese rare earth exports.
Actual procurement nevertheless becomes less predictable when supplier willingness sits alongside the licensing process. Export volumes for many rare earths and related magnets have recovered from restrictions China introduced in April 2025, but availability remains tight for several strategically important materials, including yttrium, indium phosphide, and tungsten. These feed applications spanning semiconductors, aerospace, energy, medical devices, and defence systems.
Yttrium illustrates the gap between formal trade reopening and normal supply. Chinese exports of the material to the US have risen this year but remain around half their 2024 level, even after China shipped 27 tonnes to the US in July following two months without exports. Some US companies have waited more than six months for mineral licences, while Japanese and Indian buyers have also faced severe restrictions.
Chinese customs data show similarly sharp changes in flows to Japan. China exported no terbium to Japan between January and August this year, compared with 20 tonnes in the same period of 2025, while gallium shipments fell 65% and yttrium exports dropped 98%. Gallium and terbium are consumed in comparatively small quantities, but shortages can still constrain high-performance magnets and other advanced applications.
The sourcing issue is increasingly being treated as one of industrial concentration rather than a temporary trade interruption. G7 leaders have set targets to reduce dependence on single non-G7 suppliers for rare earths and permanent magnets, alongside measures covering stockpiling, traceability, investment, procurement tools, and data sharing.
Those diversification policies operate on a different timescale from current procurement. New processing facilities, qualified suppliers, alternative materials, and redesigned components can take years to establish, while an aerospace programme, semiconductor production plan, or medical-device order can require material within months or weeks.
The licensing process adds another variable because lead times become partly political. Several US companies have recently received approvals after extended waits, and more licences may follow around senior US-China discussions, but suppliers still have to be prepared to execute the transaction once permission is granted. Procurement therefore faces two separate gates: regulatory authorisation and commercial willingness.
China’s foreign ministry has said the country remains committed to maintaining global critical mineral supply chains, while European businesses operating in China have called for a more transparent and predictable application process. Those positions can coexist with uneven physical delivery when individual licences, customs checks, due-diligence requirements, and supplier risk decisions differ from one shipment to another.
Rare earths are expected to remain on the agenda ahead of Chinese President Xi Jinping’s planned 24 September visit to Washington. Any government-level agreement would still have to feed through into the administration of export controls and the decisions made by individual suppliers handling specific customers, end uses, and documentation.
The present constraint is therefore layered rather than absolute. Licences can take months, authorised transactions can still be declined, and alternative supply projects need time to reach commercial scale. Critical mineral procurement is increasingly determined by compliance and counterparty risk alongside the familiar questions of price, specification, and physical availability.
