Now, things just became a bit more interesting (and potentially related). China has decided to ban the export of seven major rare earth metals in all countries. Suddenly say it like a major supplier, "Hold at a minute, not so fast with these important ingredients."
While official reasons include new rules, time definitely increases eyebrows. This is happening amidst the ongoing trade tension with other major players, especially America. China's dominance in the rare earth gives them a powerful card to play. They produce about 70% of the world's mining rare Earth and is 87% of processed goods. It is a major part of the global supply chain.
These are not your average metal. They have unique magnetic and conductive properties that make them necessary for a ton of modern technologies:
Strong magnets: Electric vehicles in your phone are important for powerful, light magnets in electric vehicles, wind turbines and even small motors in your phone.
Electronics: Many rare earth are used in screen, speakers and other components in our beloved gadgets.
Clean Energy: They are important for magnets in wind turbines that generate clean electricity.
Defense: Some jet engines, lasers and missile guidance are important for military applications such as systems.
so what happens now?
Supply chain scuffle: companies relying on these specific rare earth metals will be scratching to find alternative sources. This is not easy, because it is difficult to match China dominated in processing.
Prices hike? When the supply is tight, prices usually increase. Potentially expect to look at the cost of electronics, electric vehicles and other products that use these metals.
A push for the option: It may be kick in pants. Other countries need to invest more in their own rare earth mining and processing capabilities or to find alternative materials completely. However, there is time and significant investment in installing these industries.
Land Political Chess Game: This step is definitely a power game in the ongoing global trade scenario. This highlights the world's dependence on China for these important materials.
Think of it in this way: Imagine whether a country has controlled most of the world's oil supply - they will have great impact. Rare Earth metal metal is becoming new oil in the technical world.
China's ban on these rare earth exports is a big thing that can affect industries and consumers worldwide. This reminds how our global supply chains are connected and seem to be how important these unclear metals are in our modern life. Keep an eye on it - rare earth race is getting hot!
