China Rare Earth Magnet Stranglehold

Investment Analysis Clubs Macro Economic Trends and Risks
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Several traditional and electric-vehicle makers—and their suppliers—are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said.

Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work because the restrictions only cover magnets, not finished parts, the people said.

China in April began requiring companies to apply for permission to export magnets made with rare-earth metals, including dysprosium and terbium. The country controls roughly 90% of the world’s supply of these elements, which help magnets to operate at high temperatures. Much of the world’s modern technology, from smartphones to F-35 jet fighters, rely on these magnets.

Ah a strategic reason to gin up an excuse for a war.

https://www.wsj.com/business/autos/car-companies-production-rare-earth-shortage-aaf87ad2

Major manufacturers, fearful they will have to shut down assembly lines, consider moving some parts production to China

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See Chinese smuggling - #9 by captainccs

The Captain

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Of the hundreds of requests for export licenses made by suppliers since early April, only a quarter have been granted so far, CLEPA said, with some requests rejected on what the association described as “highly procedural grounds.”

“Procedures seem to vary from province to province and in several instances IP-sensitive information has been requested,” CLEPA said, adding that if the process was not streamlined soon, more plants would likely be affected in the next three to four weeks as inventories depleted…

The shortages threaten to cause havoc in the supply chains of automakers including Volkswagen Group, Mercedes-Benz and BMW, as well as suppliers including Robert Bosch and others that rely on rare earths for applications such as motors for electric cars.

DB2

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It’s been reported that Solvay also supplies rare earths in France and the U.S. Someone should be making magnets too.

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