The Magnet Maker Is In The Driver’s Seat

Corporate Commentary · 2026-09-15

Three governments changed the incentives for rare earth magnets in eighteen months. Every change rewards the company that can make a certified, traceable magnet, and none rewards feedstock on its own

For most of the last decade the rare earth trade ran on price, and price was set in China. Since the spring of 2025 it has increasingly run on a different set of incentives than purely economic ones, e.g., national security-rooted rules, which reflect a pattern: they attach value to the finished magnet, to where its metal came from and to whether a customer has qualified it, rather than to extraction-anchored or facility-associated costs.

The sequence is worth setting out because each step has a date. In April 2025 China placed seven medium and heavy rare earths, together with the magnets that contain them, under case-by-case export licensing, and that regime has run continuously since. In October 2025 it went further, extending controls to magnets made anywhere from Chinese-origin material and to the equipment and know-how used to make them, then suspended those additional measures for a year under a leaders' agreement. The suspension expires on 10 November 2026. On 22 June 2026 Beijing added MP Materials and USA Rare Earth, the two largest U.S.-listed rare earth companies, to its export control list.

Washington moved in the same direction from the buyer's side. DFARS 252.225-7052 restricts covered-nation NdFeB and samarium-cobalt magnets in U.S. defense deliverables from 1 January 2027, and Executive Order 14415, signed in July 2026, tightens the waivers that let primes work around it and requires traced bills of materials. Defense contractors are auditing their magnet sub-tiers now.

Read together, the rules describe the supplier they want: one that already makes qualified grades, can document that the metal in them did not come from China, and can do it at scale before the dates arrive. That is a manufacturing specification, and it is the one EM&T has been building toward in South Korea.

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