Hu Xiu·2025-10-12 00:25Core Insights - Rare earth elements are essential in high-end manufacturing and defense technology, often referred to as "industrial vitamins" [1][9] - The demand for rare earth permanent magnets is expected to surge, particularly due to applications in humanoid robots [2][25] - China holds a critical position in the global supply chain of rare earths, leveraging its vast reserves and production capabilities amid escalating US-China trade tensions [3][4] Supply and Demand Dynamics - The recent export control policy implemented on October 9, 2025, is a significant catalyst for the rare earth sector, reshaping the global supply order [5] - China's strategic reserve of rare earths is set to increase by 25%, enhancing supply rigidity and control [6] - The combination of strong supply contraction and expanding high-end demand is projected to drive industry prosperity and elevate price levels [7] Industry Structure - The rare earth industry is characterized by a "North-South duopoly" structure, with major production concentrated in Baotou for light rare earths and Ganzhou for heavy rare earths [32][45] - China has completed the integration of its rare earth industry, with two major groups controlling 98% of the mining quotas, enhancing policy transmission efficiency and market regulation [47][57] Global Resource Distribution - As of 2024, global rare earth reserves are estimated at 90.88 million tons, with China accounting for 44 million tons, or 48.4% of the total [29][39] - The concentration of rare earth resources is primarily in China, Southeast Asia, Australia, Southern Africa, and the Americas [27] Technological and Competitive Advantages - China possesses a complete rare earth industry chain, from mining to refining to application, giving it unparalleled control in the global market [36][42] - Advanced separation and purification technologies, such as the low-temperature concentrated sulfuric acid roasting process, provide significant competitive advantages [43][44] Policy and Regulatory Environment - The new export control policy expands the range of controlled items and introduces "long-arm jurisdiction" principles, affecting global supply chains [65][70] - The policy aims to reshape the global rare earth supply chain and reinforce China's strategic dominance and pricing power in the sector [73][74] Key Companies in the Rare Earth Industry - China Rare Earth: Leading in heavy rare earths, with strategic advantages in resource security and industry pricing [76] - Northern Rare Earth: The largest supplier of light rare earths globally, with a complete industry chain and significant cost advantages [76] - MP Materials: The core of the US rare earth industry, moving towards vertical integration in magnet manufacturing [78] - Lynas Rare Earths: The largest rare earth separation producer outside China, crucial for Western efforts to establish an independent supply chain [78]