China's Rare Earth Export Controls Send Overseas Prices Soaring to Eight Times Domestic Levels
Alina Collins
Since China imposed rare-earth export controls in April, European dysprosium has surged to $2,250/kg — eight times the Chinese domestic price of $270 — while nearly 90% of Japan's rare-earth firms report disruption and manufacturers race to cut dependence.
How wide is the price gap?
European dysprosium — a heavy rare earth essential for EV motors — hit $2,250/kg on July 9. The same day, China's domestic price was just $270/kg, a gap of roughly eight times.
This means → the same raw material costs eight times more the moment it crosses China's border. Export controls have split the global rare-earth market into two worlds.
Terbium, another heavy rare earth used in EV motors, has risen more than five-fold offshore. China's domestic dysprosium price, by contrast, is up less than 20% from pre-control levels.
Why has the Chinese price barely moved?
China is virtually the sole producer of heavy rare earths like dysprosium. Output last year was 270,000 metric tons, roughly flat versus 2024 — production has not fallen.
In plain terms = the controls restrict the *export gate*, not the *mine*. China itself has plenty of supply, so domestic prices stay calm.
This reflects the design logic of the controls: stabilize prices at home, manufacture scarcity abroad, and push the full cost burden onto offshore buyers.
How hard has Japan been hit?
A June survey by Tokyo supply-chain firm Resilire polled 400 rare-earth decision-makers. 88.2% of Japanese firms reported disruption; 17.5% said operations had halted entirely.
Chinese customs data is starker still: shipments of dysprosium-labeled goods to Japan this year stand at zero.
This means → cut off from Chinese supply, Japanese firms have been forced to source from the U.S. and Europe. Non-Japanese buyers are also stockpiling, adding further upward pressure on offshore prices.
How are manufacturers responding?
Nissan has slashed heavy rare-earth content in the latest Leaf EV motor by more than 90% compared with the 2010 first-generation model.
Toru Okabe, a rare-earth researcher at the University of Tokyo, said: "If the trend toward rare-earth-free products accelerates, a softening in heavy rare-earth prices cannot be ruled out."
A rare-earth trading company executive offered a counterpoint: "As long as Chinese exports remain stalled, prices lack downward momentum."
Can the gap narrow?
Yoshikiyo Shimamine, senior researcher at the Dai-ichi Life Research Institute, argues China is unlikely to relax controls because it "wants to keep rare earths as a useful diplomatic lever."
In plain terms = the controls are not loosening any time soon — China holds a bargaining chip and has no incentive to give it up voluntarily.
Whether offshore supply can find alternative sources is the core variable determining if this eight-fold price gap will narrow.
Content is for reference only, not financial advice.