China shipped 6,165 tonnes of rare earth permanent magnets abroad in September, the highest monthly total this year and up 23% from August, according to an analysis of customs data by Shanghai Metals Market (SMM). The gains went mostly to Europe. Shipments to Japan fell 19.1% to 172 tonnes, and exports of the most tightly controlled rare earth materials stayed far below historical levels.

For manufacturers across Asia, the split matters as much as the total. Magnets made from neodymium and related elements go into electric vehicle motors, wind turbines, robots and defense systems, and China dominates their supply. The September figures suggest Beijing's licensing system is now delivering more product overall while still deciding who gets it, and how fast.

Europe gains from China's rare earth fast track

The European Union took 2,454 tonnes of Chinese magnets in September, up 20.5% from August and the most since February, according to Chinese customs figures reported by Qatar Tribune, citing agency reports. South Korea and Germany were China's two largest buyers. The U.S. ranked third with 604 tonnes, up 18% after a 20.9% fall in August.

The European rebound followed a ministerial meeting in Beijing on Oct. 8 and 9 between Commerce Minister Wang Wentao and Maros Sefcovic, the European Commission's trade chief. China agreed there to keep easing licence approvals for EU-bound rare earths and magnets through what China Daily described as a "green channel." In return, the EU said it would work with member states on priority licences for dual-use goods heading to China, The Brussels Times reported. Both sides also agreed to give advance notice when companies are added to or removed from export control lists.

SMM linked September's jump to the release of shipments that had piled up at ports in July and August under tighter licensing, and to easier approvals after U.S.-China trade talks that month ended with a positive consensus. Exports of magnets in the first nine months of the year totalled 48,055 tonnes, up 20% from a year earlier, SMM said. It expects shipments to settle at about 5,700 tonnes a month in the fourth quarter.

Raw rare earth exports also improved. China sold 4,269.8 tonnes abroad in September, up 6.7% from a year earlier, SMM reported, though shipments for January to September were still 9.6% lower at 43,711.2 tonnes.

Japan and the U.S. still lag

Japan is the outlier. The 19.1% drop in magnet exports there came during a diplomatic impasse between Beijing and Tokyo, Qatar Tribune reported. Japan's carmakers and electronics groups are among the world's largest users of rare earth magnets.

Data on the export-controlled materials themselves, the compounds and metals Beijing placed under licensing, look worse for Tokyo. Shipments of those products to Japan remained minimal in September, even with the first shipment in three months, according to a report by the Silverado Policy Accelerator, a Washington think tank. Exports to South Korea declined substantially in the month, it said.

China's global exports of the controlled compounds and metals fell to 122 tonnes in September from 143 tonnes in August, Silverado found, and remained "well below historical levels." The EU became the largest destination. Shipments to the U.S. rose to 38 tonnes from 6 tonnes.

On magnets, the U.S. has not caught up. American imports of Chinese magnets totalled 4,637 tonnes from January to September, about 15% below the 5,478 tonnes of the same period in 2024, Silverado said. Among the major destinations it tracked, the U.S. was the only one to receive less than in 2024. EU volumes rose about 11% over that comparison and South Korea's 33%.

What investors in Asia are watching

For Japanese automakers and component suppliers, the risk is on two fronts at once: fewer finished magnets from China, and only token amounts of the controlled materials used to make magnets elsewhere.

For U.S. buyers, access depends on the trade truce that suspended China's October 2025 rare earth controls for a year. Capital Times has explained how that truce works and what happens if it lapses. China's broader exports have been strong, jumping 36% in September on AI-related demand.

Europe has a timetable. The EU and China plan a ministerial video call in January 2027 and a third round of trade consultations in March 2027, according to both The Brussels Times and China Daily.

The next data point comes sooner. China's customs administration is due to publish October trade figures in the coming days, with the country breakdown for magnets following later in the month. That release will show whether September's peak was a one-off backlog clearance or the start of SMM's steadier 5,700-tonne monthly pace.