China May Tighten Rare Earth Supply After U.S. Drone Ban

Washington’s decision to bar foreign-made drones has prompted market jitters that China could leverage critical-mineral supply lines.
Industry sources report rumblings that mixed rare earth carbonate prices are being pushed toward nearly double the recent $5,000–$9,000/ton range, though broader confirmation is lacking.
Rare earth carbonates are essential precursors for oxides, metals and permanent magnets used in motors, sensors, guidance systems and power electronics—components central to aerospace, defense, EVs and advanced electronics.
Beijing still dominates global rare earth processing capacity, and history shows export controls, licensing delays or market interventions can quickly lift prices: yttrium oxide in Europe surged more than 4,400% in 2025 after export restrictions, while NdPr oxides recently reached multi‑year highs.
A carbonate shock would propagate upstream, amplifying shortages and accelerating Western funding for separation and processing projects outside China.
Analysts say price action alone could achieve strategic aims—squeezing manufacturers, testing political resolve, or signaling retaliation—while others caution that domestic Chinese overproduction and short-term market dynamics may limit sustained disruption.
The episode underscores a blunt lesson: drone sovereignty without materials sovereignty leaves critical supply chains exposed, and policymakers are watching for any concrete export steps or persistent price trends.