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Supply Chain Graphic of the Week: What is the Big Deal with Rare Earth Metals?

 

Would a Chinese Export Ban Cause Manufacturing Disaster for US?

 

May 30, 2019

 

You have probably heard about something called so-called rare earth metals in recent days.

 

Why? Because there have been reports from Chinese sources that the country may cut off exports of 17 oddly named metals such as such as yttrium and promethium, vital to producing products including autos, electronics, electric cars, batteries, defense systems and more.

 

Rare earths also serve as catalysts to turn oil into gas and jet fuel. But  China may stop shipping them to the US if the trade war between esclates further.

 

And that in turn because China dominates in terms of rare earth metals reserves and production, as shown in the graphic below, based on US government estimates.

 

 

 

And China just might do it. It stopped shipping rare earths to Japan for awhile in 2010 due to a dispute over islands and control of boundary waters in the East China Sea.

 

So could a distaster be looming? While prices might skyrocket in the short term, the consensus seems to the US would get through such a ban, as it sources the metals from other countries, engineers find ways to not need the metals (as Japan did in 2010), the US and Austrlia ramp up productoion and more.

 

Still, this is all just another risk to the global and US economy.

 

 

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