Sou Hu Cai Jing·2026-01-15 10:51Core Viewpoint - The announcement by Lynas Corporation regarding the commercial production of dysprosium in May 2025 is perceived as a significant step towards reducing dependence on Chinese rare earths, but the reality reveals a substantial gap in production scale and cost efficiency compared to China [1][3][5]. Production Capacity Discrepancy - Lynas plans to produce 1,500 tons of dysprosium annually, while China's production consistently ranges from 10,000 to 15,000 tons [5][13]. - The export price of Chinese dysprosium is approximately $4 to $7 per kilogram, whereas Lynas's cost is between $10 to $15 per kilogram, highlighting a significant cost disparity [5][7]. Technological and Operational Challenges - Lynas's production capabilities are still at a laboratory level, leading to higher costs and inefficiencies compared to China's well-established industrial processes [7][9]. - The lack of a complete production chain and low efficiency in Lynas's operations raises doubts about its ability to compete effectively in the market [9][11]. Equipment Export Restrictions - Since 2023, China has ceased exporting critical equipment and technology for rare earth separation and magnet production, creating a significant barrier for Western companies attempting to develop their own capabilities [15][17]. - The "0.1% long-arm jurisdiction" rule implemented by China further restricts Western access to technology, as any product containing even a small percentage of Chinese rare earths is subject to export controls [17][19]. Dependency on Chinese Supply - The U.S. and other Western nations are heavily reliant on Chinese rare earths, with 17 out of 50 critical rare earth elements being highly dependent on Chinese supply [19][21]. - The inability to source essential materials for advanced manufacturing, such as the F-35 fighter jet, underscores the critical nature of this dependency [26][28]. Historical Context and Future Outlook - Historical shifts in rare earth production, such as Japan's transition to China due to high environmental costs, illustrate the challenges Western nations face in attempting to rebuild their own supply chains [31][33]. - Lynas's current production levels are insufficient to meet the demands of global high-end manufacturing, indicating that the Western push for self-sufficiency in rare earths is overly optimistic [13][35]. Conclusion - The perceived breakthroughs by Lynas are more reflective of Western anxieties about dependency on China rather than a genuine shift in the global rare earth landscape, suggesting that the industry will continue to rely on China for the foreseeable future [36][37].