WSW, NY, October 12th, 2026, FinanceWire
China’s export controls have split one market into two: a Chinese domestic price and a far higher price for everyone else. The gap widened again last week, and one Nasdaq-listed producer makes its magnets on the expensive side of the divide.
In the week ended October 1, the prices of dysprosium and terbium, the two rare earths that keep magnets working at high temperatures, jumped sharply outside China. Fastmarkets reported the gains on October 6, with market participants pointing to strong U.S. demand ahead of the January defense sourcing rules. The same oxides trade at a fraction of those prices inside China. There are now, in effect, two prices for the same metal: one for buyers inside China’s export licensing system, and one for everyone else.
The gap is not small. Fastmarkets assessments in late August put dysprosium oxide at roughly $1,250 to $1,675 per kilogram outside China, against $270 to $330 inside. Terbium oxide traded around $4,200 to $5,000 against $1,180 to $1,270. Multiples of roughly five to one and four to one are the market pricing what it costs to build magnets that never touch China’s system, and the premium has been widening as the January deadline approaches rather than closing.
Why the premium keeps growing
The demand side of the expensive market is being written into law. From January 1, 2027, the DFARS 252.225-7052 restriction extends to the entire supply chain of neodymium-iron-boron magnets, from mining through the finished magnet, for qualifying U.S. defense systems, and a July executive order tightened the conditions for waivers. An October 8 report from the Aerospace Industries Association, whose members include nearly 300 companies, told the Pentagon that compliant aerospace-grade capacity is not expected until 2028 or later. Buyers who need compliant magnets next year are being told the domestic wait is measured in years.
The supply side is not stepping in fast enough to close the gap. MP Materials began shipping sintered magnets to General Motors on October 5, the first domestic supply line, but its initial Fort Worth output, about 1,000 metric tons a year for 500,000 GM vehicles, sits under a Pentagon-backed arrangement that includes a Department of Defense equity stake and a guaranteed $110 per kilogram price floor. China, meanwhile, added MP Materials and USA Rare Earth to its export control list in June, and reporting in October described American processors as still barred from dual-use equipment and reagents. The largest American producer is committed to its anchor buyers and constrained on Chinese inputs at the same time. Everyone else competes for what remains.
Where Evolution Metals sits
Evolution Metals & Technologies Corp. (NASDAQ: EMAT), a U.S.-based critical-materials company, produces on the expensive side of the divide. It operates commercial-scale sintered magnet production in Pohang, South Korea, with six-grade certifications, and its NdPr metal arrives under a non-China supply contract with Senri Trading and SRE Vietnam; the first shipment landed in July, and the company has stated it expects more to arrive under the contract, with shipments increasing in volume. Thirteen additional ULVAC production machines are scheduled for delivery in October, per the company’s latest release, with installation to begin immediately, and the company opens its largest facility to buyers on December 17, at a plant it describes as the largest high-performance rare earth magnet facility in production outside China.
The market signal has already reached the company’s numbers. On October 9, EM&T raised its fiscal 2026 revenue guidance 62 percent at the midpoint, to $10 million to $11 million, and reaffirmed its fiscal 2027 outlook of $400 million to $460 million. Chief Executive Officer Frank Moon attributed the raise to strong customer demand and, in his words, “improved rare earth pricing.” When a producer selling into the premium tier says pricing helped its numbers, the two-tier market stops being an abstraction. With NdPr already under contract, the next milestones are dysprosium sourcing for its high-temperature grades and the climb from roughly 1,000 tons of capacity toward its 10,000-ton target.
For two years, non-China magnets were a policy story. They are now a price on a screen: the same metal costs several times more outside China’s system, and the buyers U.S. law is pushing toward that half of the market keep paying it. EM&T is a listed producer that makes its product on that side, and its calendar is stacked: machines in October, Beijing’s export-control decision on November 10, Pohang on December 17, and the defense rule on January 1. For buyers racing the January deadline, EM&T is already making the product they need, at commercial scale, outside China’s system.
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