China’s Rare-Earth Magnet Exports to US Plunge 11% - Supply Chain Tremors Hit Tech & Defense
China just squeezed the pipeline. Rare-earth magnet shipments to the United States took a sharp 11% dive last month, signaling a strategic tightening of a critical resource.
The Invisible Chokehold
These aren't just any magnets. They're the high-performance, permanent kind that power everything from electric vehicles and wind turbines to fighter jet guidance systems. China controls the overwhelming majority of global production. An 11% monthly drop isn't a market fluctuation—it's a geopolitical lever being pulled.
Tech's Fragile Backbone
Every major tech and green energy transition hinges on these components. A sustained reduction doesn't just raise costs; it threatens manufacturing timelines and exposes the fragility of concentrated supply chains. Companies built on just-in-time delivery are now staring at just-in-case scenarios.
Finance's Predictable Blind Spot
Markets hate physical constraints. You can't algorithm your way out of a shortage when the raw materials are locked behind a single border. Yet another reminder that the 'efficient market' often forgets to factor in real-world friction—until it's too late. The 11% figure is a cold dose of supply-chain reality, cutting through the usual speculative noise.
Holding lending rates steady while the economy slows
A Reuters survey said China’s central bank plans to keep benchmark lending rates unchanged in December for the seventh month in a row.
All 25 respondents expected the one-year loan prime rate to stay at 3.0% and the five-year rate at 3.5%. The view followed the central bank’s MOVE this month to leave its seven-day reverse repo rate at 1.4%, which supports LPR levels.
LPRs are calculated each month from proposed rates submitted by 20 commercial banks to the Chinese central bank.
Factory output and retail sales slowed in November as China’s property slump weighed on demand. The country recorded a trade surplus above $1 trillion in the first eleven months of 2025, but exporters are bracing for a tough 2026 as trade tensions build.
A Shanghai bank trader said banks face record-low net interest margins of 1.42% and allegedly warned that:-
“A cut in LPR now WOULD mean a reduction in mortgage rates at the start of next year, which would make life more difficult for banks.”
Economists reportedly believe that policymakers see no need to cut rates this month because China is still on track for its 5% growth target for 2025. Citi analysts expect the central bank to begin easing in January 2026, while ING analysts predict new support in the early part of next year.
China Post Securities on Friday said officials may consider a 20-basis-point interest rate cut in the first half of 2026, and Citic Futures forecasted 10–20-basis-point cuts in 2026.
The smartest crypto minds already read our newsletter. Want in? Join them.
