ZGXT(SZ:000831) Sou Hu Cai Jing·2025-07-01 07:15Core Viewpoint - The recent U.S.-China trade negotiations have highlighted China's export control on the rare earth element samarium, which is crucial for advanced military technologies, raising concerns in the global defense industry [1][3]. Group 1: Supply Chain and Dependency - China accounts for approximately 87% of the global supply of samarium, with Lockheed Martin indicating that each F-35 fighter jet requires 1.2 kg of samarium-cobalt permanent magnets, essential for radar and missile guidance systems [1]. - New export license regulations from China have led to a situation where U.S. military-grade samarium-cobalt permanent magnet inventories can only sustain production needs for about six months, indicating a potential supply chain crisis [1]. - Despite efforts to rebuild the rare earth supply chain through the Inflation Reduction Act, the cost of producing military-grade samarium in California is 3.2 times higher than that of similar products from China [3]. Group 2: Technological Advancements and Challenges - The Baotou Rare Earth Research Institute in China has made breakthroughs in samarium-iron-nitride magnet technology, increasing energy density by 40% compared to traditional samarium-cobalt materials, complicating U.S. efforts to find technological alternatives [3]. - A significant 83% of rare earth material suppliers in the existing military certification system are still from China, creating a challenging dependency for U.S. defense contractors [3]. Group 3: Market Dynamics and Impact - From January to August 2024, China's rare earth exports to the U.S. decreased by 29%, while the export price increased by 18%, indicating a strategic control over the U.S. military-industrial complex [5]. - General Dynamics in Texas has postponed the mass production of the "Abrams X" tank due to a shortage of samarium materials, which has affected the turret gyroscope standards [5]. - The limited supply strategy employed by China poses a more significant threat to U.S. military production capabilities than a complete embargo [5]. Group 4: Geopolitical Implications - The competition over rare earth elements reflects a broader restructuring of power within global supply chains, as China leverages its technological patents and resource reserves to create new trade barriers [7]. - The ongoing silent struggle between the U.S. and China over rare earth elements is expected to profoundly influence the balance of military technology over the next decade [7].