China's Export Curbs Squeeze Aerospace Rare Earth Supply

The aerospace industry faces mounting challenges as China's export controls on critical rare earth elements persist into 2026, severely impacting the availability of heavy rare earths (HREEs) such as dysprosium and terbium. These materials are indispensable for manufacturing high-performance permanent magnets that operate reliably under extreme conditions—high temperatures, intense vibrations, and radiation exposure common in aircraft engines, avionics systems, satellites, and navigation equipment. Industry experts warn that without swift diversification of supply chains, production delays and cost spikes could ripple through global aerospace manufacturing hubs in the US, Europe, and allied nations.

Dysprosium, in particular, stands out as a linchpin for aerospace applications. Added to neodymium-iron-boron (NdFeB) magnets, it boosts coercivity, allowing motors and actuators in jet engines and satellite thrusters to maintain strength at temperatures exceeding 150°C. Without dysprosium doping, these magnets lose efficiency, compromising fuel efficiency in turbine engines and precise control in inertial navigation systems used for aircraft guidance. Recent data shows China's December 2025 exports of certain rare earth compounds plummeted 15.8% below annual averages, with HREE derivatives like dysprosium oxides drying up entirely due to dual-use licensing regimes targeting defense sectors.

Aerospace manufacturers reliant on these magnets for electric propulsion in drones, avionics sensors, and satellite gyroscopes are now scrambling for alternatives. Western processing capacity lags, with new facilities not expected until 2027, driving premiums five to six times higher than Chinese prices. This squeeze underscores rare earths' role in safety: dysprosium-enhanced magnets ensure reliable operation of flight control surfaces and radar systems, where failure could spell disaster. Companies like those producing F-35 avionics or Starlink satellites are particularly vulnerable, as requalifying magnets without HREEs demands years of testing.

Beyond immediate shortages, the crisis highlights geopolitical vulnerabilities. Canada's strategy emphasizes domestic refining for aerospace-grade materials, but scaling remains slow. Experts like Charles Altshuler of Globe Metals note that qualification and assured supply chains are the real bottlenecks, not just raw extraction. As demand surges from AI-driven robotics and defense rebuilds, aerospace firms must invest in recycling and synthetic substitutes—though none yet match dysprosium's performance in high-stakes environments. This saga reveals how a handful of obscure elements underpin the reliability of modern flight and space exploration.