Weekly News Review July 20 – July 26 2026

China’s latest June export data paints a mixed picture: magnet exports continued to recover, while shipments of critical materials such as gallium and germanium declined further. Meanwhile, Australia’s Lynas, the largest rare earth producer outside China, released its latest quarterly results.

AUSTRALIA: LYNAS SIGNIFICANTLY BOOSTS REVENUE –

The largest producer of rare earths outside China is benefiting from higher prices and stronger demand for its products. At the same time, technical challenges and sharply rising costs are weighing on efforts to build alternative supply chains.

Australian rare earth producer Lynas has reported a record quarterly revenue for the fourth quarter of its fiscal year 2026. During the three months ending in June, the company generated approximately $202 million, marking its strongest quarterly revenue in four years. Revenue increased by 70% year over year, driven by higher realized prices for neodymium-praseodymium (NdPr), a larger share of high-value heavy rare earth products in its sales mix, and growing demand for supply chains outside China.

Operational performance, however, was mixed. Total rare earth oxide (REO) production rose slightly to 3,481 tonnes, but NdPr output declined from 1,996 tonnes to 1,857 tonnes. Lynas attributed the decrease to water treatment issues at its Mt Weld mine in Western Australia, as well as fluctuations in ore quality. These factors disrupted downstream processing at the company’s Kalgoorlie processing facility in Australia and its refining operations in Malaysia.

Expansion of Alternative Supply Chains Proves More Costly:

Lynas also encountered setbacks in its capacity expansion plans. The estimated cost of its heavy rare earth processing facility in Malaysia has increased significantly, from approximately $126 million to $206 million. According to the company, the higher budget reflects additional processing technology required to meet stricter product quality standards, as well as the higher cost of sourcing equipment from suppliers outside China.

The company did, however, report progress in broadening its product portfolio. Following the first production of samarium oxide in March, Lynas expects to begin customer shipments during the current quarter. Production of gadolinium, yttrium, and later lutetium is scheduled to follow. All four are among the seven rare earth elements whose exports China placed under strict licensing requirements in April 2025. Since then, producers outside China have accelerated efforts to expand their product offerings and strengthen the resilience of global rare earth supply chains.

Lynas is widely regarded as one of the most important companies in the effort to establish a secure Western rare earth supply chain and continues to receive support from governments, including the U.S. Department of Defense, as strategic economies seek to reduce their dependence on Chinese supply.

US TIGHTENS RAW MATERIALS FOR THE DEFENCE INDUSTRY:

Stricter procurement rules are set to take effect from 2027, including restrictions on rare earth magnets. A new executive order aims to limit exemptions further and strengthen supply chain oversight.

Starting on January 1, 2027, stricter procurement requirements will apply to acquisitions by the U.S. Department of Defense. Certain rare earth magnets, as well as tantalum and tungsten products, will no longer be permitted if any part of their supply chains is linked to China, Russia, Iran, or North Korea. A new executive order issued by U.S. President Donald Trump further tightens these upcoming requirements.

The main focus is on making exemptions more difficult to obtain. Contractors will be required to demonstrate that no compliant alternative source is available and provide a binding roadmap for transitioning to a different supplier. At the same time, defense companies will have to disclose their supply chains in significantly greater detail. The U.S. Department of Defense has been instructed to develop corresponding implementation guidelines within 180 days.

Companies that continue to use materials or components from foreign suppliers classified as unreliable may be required to transition to alternative sources where available. Failure to comply could result in measures including the suspension or termination of contracts. At the same time, the Department of Defense intends to accelerate review and approval procedures.

However, implementing the stricter regulations could prove challenging. Despite increasing investments in domestic supply chains and raw material projects in partner countries, the United States remains heavily dependent on China.

Additional pressure could come from China’s export controls, announced in October 2025, that cover additional rare earth products, production equipment, and related technologies. These measures are currently suspended until November 10 of the current year. If they come into force, they could significantly affect the U.S. defense industry, as many of the materials involved are also used in military applications.

CHINA: EXPORT OF RARE EARTH MAGNETS RISES SHARPLY:

China’s exports of rare earth magnets increased significantly in June. A total of 5,649 tonnes of the high-tech components were shipped abroad, up from 4,730 tonnes in May, representing an increase of around 19 percent. As in the previous month, the main destinations were Germany, South Korea, the United States, Vietnam and India, according to the latest data from Chinese customs authorities.

Exports were also substantially higher than a year earlier. In June 2025, China had shipped just 3,188 tonnes. At the time, export controls on certain rare earth products introduced in early April 2025 were likely still affecting trade flows. The new regulations caused delivery delays lasting several months in some cases, partly because exporters were required to provide additional documentation on the composition of the magnets.

CHINA: EXPORTS MORE TERBIUM, LESS DYSPROSIUM IN JUNE:

Asia dominates the export destinations; North America remains cut off.  

China’s exports of dysprosium declined sharply in June, while terbium shipments rebounded from the subdued levels recorded a month earlier. According to Chinese customs data, 2,098 kilograms of dysprosium and 3,100 kilograms of terbium were exported during the month.

Malaysia was the largest destination for dysprosium, receiving 1,080 kilograms, while the remaining 1,018 kilograms were shipped to South Korea. Terbium exports were dominated by South Korea, which imported 2,600 kilograms. The remaining 500 kilograms were exported to Estonia.

The latest figures underscore that Beijing’s export licensing regime continues to shape trade flows for the two heavy rare earth elements. While export volumes have recovered from the near standstill that followed the introduction of export controls in April 2025, shipments remain concentrated among a small number of countries with established downstream processing and manufacturing capabilities.

Malaysia hosts Lynas Rare Earths’ separation facility, the largest rare earth refinery outside China, while Estonia is home to Neo Performance Materials’ magnet manufacturing operations.  

Dysprosium and terbium are essential heavy rare earth elements used to improve the heat resistance and magnetic performance of neodymium-iron-boron (NdFeB) magnets. These materials are critical for demanding applications including electric vehicle traction motors, wind turbines, industrial automation, and defense technologies.

CHINA: GALLIUM AND GERMANIUM EXPORTS PLUNGE IN JUNE:

Following a brief recovery in May, China’s exports of the technology metals gallium and germanium fell sharply again in June, according to the latest data from the Chinese customs authorities.

While 6,200 kilograms of gallium were exported in the previous month, shipments dropped to just 200 kilograms in June. This represents a decline of around 97%. Exports were also significantly lower than in the same period last year, when China shipped 4,260 kilograms of gallium.

Of the 200 kilograms exported, 150 kilograms went to South Korea and the remainder to Vietnam. This marks a shift in destinations, as Germany has been one of the main buyers so far this year. Japan also received gallium in May—the only such shipment since China tightened its export controls on the country in January.

Germanium exports also fell sharply in June. After reaching 1,134 kilograms in May, shipments declined to just 620 kilograms, a drop of around 45%. However, the volume was significantly higher than in the same month last year, when China exported only 96 kilograms.

Almost all of the 620 kilograms went to Russia, which had already ranked among the main export destinations in previous months. Armenia received just three kilograms.

The technology metals gallium and germanium are essential for numerous civilian and military applications, including semiconductor production. China, the world’s leading producer, imposed strict controls on exports of the two raw materials and large parts of their value chains in summer 2023. Since then, trade flows have become even more volatile and, and are partly influenced by China’s current political relations with the respective destination countries.