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Analysts say China's move could reverberate across global supply chains and disrupt key sectors of South Korea’s manufacturing industry.
According to the report, Beijing has halted shipments of rare earth elements and associated magnetic materials widely used in high-tech production. The suspension is widely interpreted as a retaliatory response to steep tariffs imposed by the Trump administration.
The export ban is expected to remain in place until China implements a new regulatory framework, one that could permanently restrict the sale of these materials to American companies, including those in the defense industry.
China’s Ministry of Commerce had signaled the move on April 4, when it announced new export controls on seven specific rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — to be enforced through a licensing system.
South Korean automakers, including Hyundai Motor, are closely monitoring the developments. Dysprosium, in particular, is crucial for the production of electric vehicle motors and battery components, and prolonged supply disruptions could have serious implications for the sector.
The impact on the domestic display industry, however, is expected to be more limited. While terbium and yttrium are used in small quantities in the manufacture of color filters and phosphors for OLED displays, industry sources said the relatively minor volumes involved may buffer major disruptions.
Semiconductor and battery manufacturers are also bracing for the potential fallout. Experts warn that China’s tightening control over rare earth exports may accelerate efforts among global tech firms to diversify supply chains and reduce reliance on a single source of these critical materials.
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