Latest news with #BenjaminKrieger
NDTV
2 days ago
- Automotive
- NDTV
China's Rare Earth Restrictions Cripple Auto Industry Globally
The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60 percent of rare earth mining production and 92 percent of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the United States has developed, Beijing has required Chinese companies since April to obtain a license before exporting these materials -- including rare earth magnets -- to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. "Since early April, hundreds of export license applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved," the European Association of Automotive Suppliers (CLEPA) said Wednesday. "Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information." And US Treasury Secretary Scott Bessent this month said Beijing was "blocking certain products it had agreed to market as part of our agreement". China, however, defended its "common international practice". Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them -- neodymium and dysprosium -- are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in "electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles", according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98 percent of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, "rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector". Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources "offer no short-term solutions and cannot address the acute risks currently facing supply chains". Production halts, supply concerns The auto industry is already suffering globally. "With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector," said CLEPA Secretary General Benjamin Krieger. The group on Tuesday reported "significant disruptions" in Europe, where these restrictions "have led to the shutdown of several production lines and plants". It warned that "further impacts (were) expected in the coming weeks as inventories deplete". "The slow pace of customs formalities for shipments requiring a valid export license poses a problem," Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. "If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out." While not citing "direct restrictions" for itself, Germany's Mercedes-Benz said it was maintaining "close contact" with its suppliers, while Japan's Suzuki Motor said Thursday it "had ceased production of certain models due to a component shortage", including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on "supplier issues". Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. "The slow processing of (export) requests appears to be causing significant supply shortages," Cornelius Bahr from IW Economic Institute told AFP. "Statements (by German companies) indicating that stocks will only suffice through the end of June should certainly be taken seriously." The electronics industry, another major consumer of rare earths, could also suffer. "Concern is visibly growing, many companies currently have resources only for a few weeks or months," said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. "There should no longer be any questions respecting the complexity of (exporting) Rare Earth products," Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate "an agreement was reached to overcome immediate obstacles, particularly concerning critical minerals", noted Wendy Cutler, vice president of the Asia Society Policy Institute.
The Sun
2 days ago
- Automotive
- The Sun
Auto sector hit by China rare earth curbs
TOKYO: The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60% of rare earth mining production and 92% of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the US has developed, Beijing has required Chinese companies since April to obtain a licence before exporting these materials – including rare earth magnets – to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. 'Since early April, hundreds of export licence applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved,' the European Association of Automotive Suppliers (CLEPA) said Wednesday. 'Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information.' And US Treasury Secretary Scott Bessent this month said Beijing was 'blocking certain products it had agreed to market as part of our agreement'. China, however, defended its 'common international practice'. Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them – neodymium and dysprosium – are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in 'electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles', according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98% of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, 'rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector'. Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Production halts, supply concerns The auto industry is already suffering globally. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said CLEPA secretary-general Benjamin Krieger. The group on Tuesday reported 'significant disruptions' in Europe, where these restrictions 'have led to the shutdown of several production lines and plants'. It warned that 'further impacts (were) expected in the coming weeks as inventories deplete'. 'The slow pace of customs formalities for shipments requiring a valid export licence poses a problem,' Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. 'If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out.' While not citing 'direct restrictions' for itself, Germany's Mercedes-Benz said it was maintaining 'close contact' with its suppliers, while Japan's Suzuki Motor said Thursday it 'had ceased production of certain models due to a component shortage', including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on 'supplier issues'. Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. 'The slow processing of (export) requests appears to be causing significant supply shortages,' Cornelius Bahr from IW Economic Institute told AFP. 'Statements (by German firms) indicating that stocks will only suffice through the end of June should certainly be taken seriously.' The electronics industry, another major consumer of rare earths, could also suffer. 'Concern is visibly growing, many companies currently have resources only for a few weeks or months,' said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. 'There should no longer be any questions respecting the complexity of (exporting) rare earth products,' Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate 'an agreement was reached to overcome immediate obstacles, particularly con-cerning critical minerals', noted Wendy Cutler, vice-president of the Asia Society Policy Institute.
The Sun
2 days ago
- Automotive
- The Sun
Auto sector reels from China's rare earth restrictions
TOKYO: The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60 percent of rare earth mining production and 92 percent of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the United States has developed, Beijing has required Chinese companies since April to obtain a licence before exporting these materials -- including rare earth magnets -- to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. 'Since early April, hundreds of export licence applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved,' the European Association of Automotive Suppliers (CLEPA) said Wednesday. 'Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information.' And US Treasury Secretary Scott Bessent this month said Beijing was 'blocking certain products it had agreed to market as part of our agreement'. China, however, defended its 'common international practice'. Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them -- neodymium and dysprosium -- are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in 'electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles', according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98 percent of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, 'rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector'. Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Production halts, supply concerns The auto industry is already suffering globally. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said CLEPA Secretary General Benjamin Krieger. The group on Tuesday reported 'significant disruptions' in Europe, where these restrictions 'have led to the shutdown of several production lines and plants'. It warned that 'further impacts (were) expected in the coming weeks as inventories deplete'. 'The slow pace of customs formalities for shipments requiring a valid export licence poses a problem,' Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. 'If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out.' While not citing 'direct restrictions' for itself, Germany's Mercedes-Benz said it was maintaining 'close contact' with its suppliers, while Japan's Suzuki Motor said Thursday it 'had ceased production of certain models due to a component shortage', including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on 'supplier issues'. Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. 'The slow processing of (export) requests appears to be causing significant supply shortages,' Cornelius Bahr from IW Economic Institute told AFP. 'Statements (by German companies) indicating that stocks will only suffice through the end of June should certainly be taken seriously.' The electronics industry, another major consumer of rare earths, could also suffer. 'Concern is visibly growing, many companies currently have resources only for a few weeks or months,' said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. 'There should no longer be any questions respecting the complexity of (exporting) Rare Earth products,' Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate 'an agreement was reached to overcome immediate obstacles, particularly concerning critical minerals', noted Wendy Cutler, vice president of the Asia Society Policy Institute.
Yahoo
3 days ago
- Automotive
- Yahoo
Suzuki production halted by China rare-earth export restrictions
Suzuki has suspended production of most of its Swift car models at its Japanese plants due to a shortage of parts linked to China's rare-earth export restrictions, according to a Nikkei business daily report. Reports say the suspension of production began on May 26 and is set to continue until June 6 due to a shortage of key components. The move is reportedly linked to delays in parts procurement caused by slow Chinese export licence approvals. China accounts for over two thirds of the world's rare-earth metal production and an even higher percentage of rare-earth magnet manufacturing. Beijing has slowed the issue of export licences since imposing new controls in April. The tightening of export licences was in response to US President Donald Trump's newly impose tariffs on imported Chinese goods. Rare-earth elements and magnets are essential for the electric motors used in vital components in various automotive applications, from windshield-wiper motors to anti-lock braking sensors and motors for electrified vehicles. Vehicle makers and suppliers around the world also stand to be impacted by the disruption to supply chains. Europe's automotive components suppliers' association, CLEPA, also warned that the European automotive supply industry is 'already experiencing significant disruption due to China's recent export restrictions on rare-earth elements and magnets'. It said the restrictions have led to the shutdown of 'several production lines and plants across Europe, with further impacts expected in the coming weeks as inventories deplete'. CLEPA called for 'constructive China-EU cooperation to ensure stable and resilient supply chains for the global automotive sector'. The trade association pointed out that the affected components are critical to both combustion engine and electric vehicles, highlighting the wide-reaching consequences of the measures. It said that since early April, hundreds of export license applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved. It added that procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of IP-sensitive information. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said Benjamin Krieger, Secretary General of CLEPA. 'We urgently call on both the EU and Chinese authorities to engage in a constructive dialogue to ensure the licensing process is transparent, proportionate, and aligned with international norms.' CLEPA also noted that Chinese suppliers of permanent magnets rely on their European customers just as much as European manufacturers depend on Chinese materials. It also warned that sustained disruptions will reinforce ongoing efforts in Europe to diversify sourcing and invest in the development of rare earth-free electric motors. However, it added that such measures 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Moreover, they also 'threaten automotive production and thousands of jobs in the European Union'. "Suzuki production halted by China rare-earth export restrictions – report" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
CNBC
3 days ago
- Automotive
- CNBC
Auto industry sounds the alarm as China's rare earth curbs start to bite
Automotive industry groups are increasingly worried about a rare earth shortage. Several European auto supplier plants and production lines have already been shut down due to China's recent export controls, according to Europe's auto supplier association CLEPA, with the group warning of more outages as inventories deplete. Germany's car industry and auto executives have also sounded the alarm, saying the highly globalized sector is acutely vulnerable to further supply chain disruption. China's Ministry of Commerce in early April imposed export restrictions on several rare earth elements and magnets widely used in the automotive, defense and energy sectors. The curbs came as part of a response to U.S. President Donald Trump's tariff increase on Beijing's products. Some of the affected rare earth elements are vital components to the production of both combustion engines and electric vehicles. CLEPA said Wednesday that while hundreds of export license applications have been submitted to the Chinese authorities since early April, only around 25% appear to have been approved. "With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector," CLEPA Secretary General Benjamin Krieger said in a statement. For its part, the German Association of the Automotive Industry (VDA), the country's main car industry lobby, warned that Beijing's export restrictions could soon cause output to grind to a halt. "The Chinese export restrictions on rare earths are a serious challenge for the security of supply, and not just in the automotive supply chains. Although some licences have now been granted, this is currently not enough to ensure smooth production," VDA President Hildegard Müller told CNBC via email. "A further problem arises from the slow customs clearance of exports for which a valid export licence has been granted. If the situation does not change quickly, production delays and even production stoppages can no longer be ruled out," she added. Müller reiterated the VDA's call for German and European Union lawmakers "to raise this issue emphatically with the Chinese side so that a solution to the situation can be found quickly." Demand for rare earths and critical minerals is expected to grow exponentially in the coming years as the clean energy transition picks up pace. China, meanwhile, is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world's production of rare earth minerals and materials. U.S. officials have previously warned that this poses a strategic challenge amid the pivot to more sustainable energy sources. Germany's BMW reportedly said Wednesday that some of its supplier network had been affected by China's export curbs, while major domestic peers Volkswagen and Mercedes-Benz Group both said they were not experiencing any shortages. "As a matter of principle, Mercedes-Benz has a strategy for all critical raw materials that are purchased directly and indirectly that secures demand in the long term and mitigates supply risks in the long term - knowing full well that raw material deposits are limited in some regions," a Mercedes-Benz Group spokesperson said in an emailed statement. The carmaker added that it was also working on concepts to "significantly reduce" the amount of rare earth metals per vehicle unit. "In the future, Mercedes-Benz wants to use new material compositions to dispense with heavy rare earth metals such as dysprosium in our electric drives," they said. A Volkswagen spokesperson told CNBC that the supply of auto parts containing rare earths was stable. "Our suppliers are continuously working with their subcontractors to obtain the necessary export licenses. We have received indications that a limited number of these licenses have been granted," they said. A spokesperson for BMW was not immediately available to comment when contacted by CNBC. It's not just European carmakers reckoning with a rare earth shortage. Japan's crisis-stricken Nissan said it was also exploring ways to minimize the impact of China's export controls by working with Japan's government and the country's Automobile Manufacturers Association. "It's something that is happening as we speak — and it is true that it will have some impact on the automotive industry," Nissan CEO Ivan Espinosa told CNBC on Wednesday. "We need to continue finding alternatives for the future, keeping flexibility and keeping our options open," he added.
