Silicon & Steel · Critical Minerals Edition

Part 2 of 3. Part 1 showed where the chokepoint really sits: in the furnace, not the mine. This part is how Beijing built the lever, and what it has cost so far.

It climbed a ladder, adding a rung each time Washington tightened its own rules, and it has never taken a rung back down. Laid out in sequence, the pattern looks less like retaliation and more like calibrated, deliberate escalation.

It began in August 2023 with licensing on gallium and germanium, moved through a ban on exporting rare-earth processing technology, then antimony controls, then an outright ban on gallium, germanium and antimony sales to the United States in December 2024.

The sharpest rung came in April 2025. Beijing's Announcement 18 put seven medium and heavy rare earths, and every downstream magnet containing them, under mandatory export licensing. Five more elements followed in October 2025. Then came the Xi and Trump meeting at Busan, and a one-year suspension that runs out on 10 November 2026. The October measures were paused. The April ones were not, and they are the ones covering the magnet metals.

Markets moved first. Gallium, which the United States has not produced domestically since 1987, has gone from an average import value of $277 a kilogram in 2021 to $580 in 2025. Antimony averaged $25 a pound last year, more than double 2024. Germanium exports out of China collapsed: 7,520 kilograms in the first nine months of 2025, against 36,656 in the same period of 2023.

But the number that says the most is the one for the magnet metal. NdPr oxide, the stuff inside electric motors, averaged $124 a kilogram in 2022, crashed to $55 by 2024, and sat at $97 in August this year. That volatility is precisely why no Western investor would fund a separation plant on market pricing alone, and precisely why the Pentagon stopped asking them to and simply guaranteed a floor of $110. Spot is currently below that floor, which means the guarantee is not a backstop sitting idle. It is paying out.

Look at the headline tonnage and you would think the squeeze had passed. Chinese exports of rare-earth permanent magnets ran to 5,375 tonnes in July 2026, and cumulative shipments for the first seven months of the year were up 32% on 2025. Story over, apparently.

It is not. Licensing does not throttle everything equally. It throttles what it names. Chinese customs data show exports of yttrium, dysprosium and terbium, the heavy rare earths caught by Announcement 18, still running at roughly half their pre-restriction level. Those are the elements that let a magnet keep working at the temperature of a jet engine or a missile seeker. The tonnage recovered. The elements a defence contractor actually needs did not.

Part 3: Can the West get out? How exposed America actually is, the quieter front in older chips, the scramble to build furnaces outside China, and what to watch between now and 2030.

Silicon & Steel Intelligence Desk, Supply Chain Strategy & Semiconductor Analysis. Nothing here is investment advice. Corrections & coffee: [email protected]