Magnet Deliveries Outside of China

With the introduction of strict export controls by China’s Ministry of Commerce on magnet compositions containing heavy rare earth elements (HRE), interest in sourcing magnets from outside of China has surged. As approval procedures now take much longer than expected, delays and supply constraints are becoming a reality. The industry is therefore being challenged more than ever to find supply chain solutions that are independent of China.

In this context, customers who have already taken advantage of our extended services—such as safety stock and strategic inventory programs—are clearly benefiting. For companies in sensitive industries, we manage stock levels of up to two years. These customers now enjoy a clear market advantage thanks to secured supply and stable planning. Our forward-looking logistics concepts are proving their full value—flexibility and reliability are once again recognized as key success factors.

Another area of focus is the transition to magnet grades that do not rely on heavy rare earths. Depending on the application, this is currently feasible for grades up to around N42SH, though each case must be individually assessed. At the same time, we closely monitor ongoing research efforts aimed at developing new magnet compositions entirely free of HRE. However, high-coercivity grades such as UH or EH will likely remain dependent on HRE for the foreseeable future.

For many years, BOMATEC has already operated a stable and proven production of injection-molded magnets in Malaysia, primarily using Japanese raw materials. This long-standing alternative outside of China is now more relevant than ever. In parallel, we are working intensively on new solutions

—particularly for sintered magnets produced in other Asian countries and India. Also for compression bonded NdFeB-magnets there is a solution is sight, more about this later.

It is foreseeable that magnet production outside of China will come with higher costs—both due to raw material pricing (which is still tied to Chinese index structures including VAT) and the smaller initial production volumes that lead to higher fixed costs. Nevertheless, we believe these investments are necessary and forward-looking. Those who invest in resilient supply chains today are securing their competitive edge for tomorrow.

In turbulent times, a strong partner by your side.