BEIJING: The threat of mass shutdowns across the automotive supply chain is fading as Chinese rare earth magnets begin to flow, though automakers and suppliers say production plans still face uncertainties and a continued risk of shortages.
European suppliers have received enough licences to avoid the widespread disruptions predicted earlier this month but hundreds of permits remain pending, said Nils Poel, head of market affairs at supplier association CLEPA.
The rate of issuance is "accelerating" and has risen to 60% from 25%, he said, but cases where the end users are based in the United States, or where products move through third countries like India, are taking longer or not being prioritised.
"Overall the feeling is that we probably will still have production in July and that the impact will be manageable," he said.
"Maybe here and there a production line will be affected, but we have avoided that for the moment."
On Friday, Ford CEO Jim Farley said during an appearance in Colorado that the company has had to shut down factories over the past three weeks because of magnet shortages, without elaborating.
Volkswagen said in a statement to Reuters its supply of rare earth components was stable while rival Stellantis said it had addressed its immediate production concerns.
China restricted exports of seven rare earths and related magnets in April in retaliation for U.S. tariffs.
Three months later there remains huge uncertainty about how it intends to police its opaque and complex export licensing system.
Since the restrictions were imposed, rare earth magnet exports from China have fallen roughly 75%, forcing some automaker production lines to halt in Asia, Europe and the United States.
FROM 'FULL PANIC' TO 'BARE MINIMUM'
The White House said on Thursday it had signed a deal with China to speed up rare earth approvals without providing details.
Beijing said hours later both parties had confirmed details of the deal struck in London earlier this month, which was meant to resolve the rare earth issue, and it would process export licences in accordance with the law.
Neither party detailed any changes to the existing export licensing system.
U.S. Treasury Secretary Scott Bessent said in an interview with Fox Business Network on Friday that, under the agreement announced on Thursday, rare earth shipments to the United States from China would be expedited to all companies that have previously received them on a regular basis.
"I am confident now... the magnets will flow," Bessent said.
"This is a de-escalation." Two weeks ago the car industry was in a "full panic," but licence approvals by China have sped up and there is now less threat of a sudden stop, according to an executive at a leading U.S. automotive supplier and a source with knowledge of the supply chain at a major European carmaker.
Both asked not to be named because of the sensitivity of the issue.
China is approving the "bare minimum" of critical licences for European firms to avoid production stoppages, a European official told Reuters, also speaking on condition of anonymity.
U.S. magnet maker Dexter Magnetic Technologies, which has defence clients, among others, has received just five of 180 licences since April, CEO Kash Mishra told Reuters, adding those were intended for non-defence sectors.
"It's an extended delay," he said. "It's 45 days trying to get the paperwork right for the supplier, and then it's 45 more days or so before any licences are granted."
Read More Details
Finally We wish PressBee provided you with enough information of ( China's rare earths are flowing again, but not freely )
Also on site :
- ‘This is murder': Family remembers victims killed in Austin fire as 4th body recovered
- RHOM star Larsa Pippen got ‘boob job, nose job, BBL and fillers’ to look like a ‘doll,’ top plastic surgeon claims
- SHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates SGMA, NVEE, SOAR, PLL on Behalf of Shareholders