China rare earth firms halt some US shipments over geopolitical worries, sources say

Some Chinese rare earth suppliers are refusing to ship to the U.S., citing potential repercussions from Beijing, according to three sources. This issue has been on the U.S. planning agenda ahead of President Xi Jinping's September visit to Washington. U.S. officials have repeatedly asked China to adhere to commitments made in Busan and Beijing to ensure the smooth flow of rare earth export licenses.

A handful of suppliers have halted shipments since early August, following China's sanctions on the Responsible Business Alliance (RBA). Some firms had already stopped shipments to the U.S. to avoid involvement in geopolitical tensions. Reuters was unable to determine the total number of Chinese suppliers who have refused to move shipments destined for U.S. clients.

While exports of rare earths and related materials have rebounded, prices of certain critical materials like yttrium, indium phosphide, and tungsten, which have military applications or are used in sensitive industries, remain near record highs with tight supply. U.S. companies have been waiting more than six months for mineral licenses in some cases.

China has been effective in using rare earth export controls to pressure the Commerce Department's Bureau of Industry and Security. Some U.S. officials expect Beijing to ease critical raw material controls around the summit to deflate allegations of non-compliance.