Permanent magnet manufacturing

What it is

Permanent magnet manufacturing is the downstream industrial step that converts separated neodymium-praseodymium (NdPr) metal alloy into sintered neodymium-iron-boron (NdFeB) magnets, the highest-energy-product permanent magnets available commercially. The process involves alloy casting, hydrogen decrepitation to produce fine powder, pressing in a magnetic field to orient crystallite grains, sintering in vacuum furnaces at roughly 1,000 degrees Celsius, precision machining to tolerances of a few micrometres, and corrosion coating. End products go into EV traction motors, direct-drive offshore wind turbines, industrial servo motors, hard disk drives, MRI machines, and precision-guided munitions including the US F-35's flight control actuators and Tomahawk guidance systems. China controls approximately 90-93% of global sintered NdFeB output, built on three decades of integrated mine-to-magnet investment and cost advantages in ore, energy, and processing scale that no other country has matched.

History

Japan's Sumitomo Special Metals and US firm General Motors independently developed sintered NdFeB technology in 1982, and commercial production began in the mid-1980s predominantly in Japan and the United States. Chinese producers entered through the 1990s and early 2000s, scaling on domestically mined rare earth ore concentrated at Bayan Obo in Inner Mongolia and supported by state-backed capital. By roughly 2000, Chinese cost advantages had displaced most Western magnet production; Japan retained a premium niche in high-coercivity grades requiring heavy rare earths. Two decades ago China held roughly 50% of sintered permanent magnet output; by 2024 that share had reached 90-93%. China demonstrated the geopolitical dimension in 2010, cutting export quotas during the Japan-China Senkaku/Diaoyu maritime dispute and triggering a global supply shock that directly prefigured the April 2025 export-control escalation.

Current state

China exported 58,000 tonnes of rare earth magnets in 2024, according to IEA data, enough to supply millions of EV drivetrains or thousands of large wind turbines. China's April 2025 export-licensing regime on NdPr oxide and alloy drove ex-China feedstock prices to roughly six times Chinese domestic levels at the April 2026 peak (see NdPr価格が4カ月で160%急騰し1キロ137ドルに達した後に反落、重希土類は130%上昇), structurally raising manufacturing costs for any non-Chinese producer relying on imported Chinese oxide. China moved further in October 2025 to apply FDPR-style controls requiring export approval for any finished magnet containing 0.1% or more Chinese-origin rare earth elements, extending its leverage into third-country manufactured goods.

Outside China, ex-China production remains below 5% of global output. MP Materials (US) began commercial NdFeB magnet production at its Fort Worth, Texas "Independence" facility in December 2025 (see MP Materials). USA Rare Earth (Stillwater, Oklahoma) produced its first sintered NdFeB batch in January 2025, targeting 1,200 tonnes per year initially. Japan's Shin-Etsu Chemical and TDK maintain production in Japan and Southeast Asia. Germany's Vacuumschmelze operates with partial German government support. Separately, Niron Magnetics broke ground in September 2025 on a rare-earth-free iron nitride magnet plant in Sartell, Minnesota targeting 500 tonnes per year by Q3 2026, the first serious commercial challenge to NdFeB dominance at scale (see Niron Magnetics がミネソタ州で窒化鉄磁石工場を起工し、Ola Electric がインドでフェライトモーターを認証、レアアース代替が商業化の転換点に).

Relationships

Demand for magnet rare earth elements has doubled since 2015 and is projected to grow a further third by 2030 under current policies, driven by the EV transition and offshore wind buildout. The IEA identifies permanent magnet manufacturing as the critical supply-chain bottleneck: planned ex-China mining and refining capacity expansion outpaces planned ex-China magnet manufacturing capacity by a factor of roughly three. China's export controls create leverage across all downstream markets simultaneously, from automotive OEMs in Germany and South Korea to US defence prime contractors. Recycling of end-of-life EV motors and wind turbines is nascent, representing under 1% of NdPr supply in 2025, but is a medium-term watch item.

What to watch

• Whether ex-China magnet manufacturing capacity reaches 10% of global output by 2028; current trajectory implies it will not without accelerated capital deployment.
• Ramp progress at MP Materials' Fort Worth facility toward 1,000 tonnes per year and USA Rare Earth's Stillwater plant through H2 2026.
• Implementation of China's October 2025 FDPR-style magnet controls and whether Beijing widens their scope when a current suspension expires in November 2026.
• Niron Magnetics' Q3 2026 first iron nitride production milestone and whether energy products meet specifications at commercial volume.
• Whether the EU's Critical Raw Materials Act generates sufficient capital to close the European magnet manufacturing gap before the end of the decade.