Goldman Sachs analysts believe China holds "very strong" and potentially long-lasting market power over rare earths due to its dominance across the entire supply chain.
- This leverage comes not just from controlling the rare earth minerals themselves, but also the crucial refining process and the subsequent production of the magnets derived from them. While common light rare earths aren't scarce, the supply of heavy rare earths (like dysprosium and terbium) is tighter because they are harder to find in economically viable amounts.
- Although the U.S. is investing in new rare-earth production, these facilities are not expected to be fully operational until 2028 or later.
- Furthermore, China has actively restricted the inventory of rare earth magnets held outside the country, resulting in low commercial inventories that amplify China's control in the near term.
