Niche critical minerals caught in China supply squeeze
A little-known rare earth element is seeing a sharp price rally as buyers stockpile material ahead of the potential return of Chinese export restrictions. Erbium, which is used in fibre optics for. . .
A little-known rare earth element is seeing a sharp price rally as buyers stockpile material ahead of the potential return of Chinese export restrictions. Erbium, which is used in fibre optics for telecommunications, glass polishing, and high-performance lasers, has been in growing demand across key markets. According to theFinancial Times, European erbium prices have surged about 50% since the beginning of June, while prices in China have risen around 40%, citing data from commodity price reporting agencyArgus Media. The rally is being driven largely by stockpiling ahead of November, when suspended Chinese export restrictions are due to return unless Beijing extends the suspension. Restrictions back on?China introduced sweeping critical mineral export restrictions last year amid its trade dispute with the US, before suspending some of the toughest measures for one year. That suspension is due to expire on 10 November, creating uncertainty over whether the restrictions will return. Buyers have responded by building inventories of materials including erbium, according to Argus. “Market participants both inside and outside of China believe that export controls may be reimposed on erbium, cutting off erbium supply to the rest of the world,”Argus rare earths pricing lead Maeve Flaherty told the Financial Times. Optics battleThe rally also comes amid reports that the US could restrict imports of new models of Chinese optical transceivers. These small, pluggable devices are an important part of the infrastructure connecting AI data centres and other high-performance computing systems. China accounts for more than half of global optical transceiver manufacturing capacity, while erbium plays an important role in fibre-optic communications. The prospect of tighter US restrictions on Chinese optical equipment has added another layer of uncertainty to the erbium market. Erbium is not the only niche rare earth affected by concerns over Chinese supply. Holmium and ytterbium were also among the materials covered by restrictions that were subsequently suspended. Since early June, Chinese holmium prices have risen about 25%, while ytterbium has jumped roughly 75%, according to Argus data cited by the Financial Times. Small markets, big movesThe rallies highlight how relatively small critical mineral markets can experience outsized price moves when supply is disrupted. TheInternational Energy Agency(IEA) recentlyhighlightedstrategic minor minerals as an area where relatively modest investment could significantly strengthen supply security, provided new projects receive sufficient policy and financial support. Among the minerals identified by the IEA as particularly exposed to supply risks is tungsten, due to its concentrated production, limited substitutes and importance across several industries. Tungsten is used in cutting tools, aerospace components, electronics and, defence applications. China accounts for about 80% of global mine production and also dominates downstream processing. The market has already experienced its own supply squeeze, with tungsten prices rising more than sixfold since early 2025 amid Chinese export controls and tight availability. Outside China, production remains limited and relatively few new projects are approaching production. Tungsten projects to watchThe supply pressures facing erbium and tungsten highlight growing efforts to diversify production of strategically important minerals outside China. This is particularly relevant in the US, which has not produced tungsten from domestic mines for about a decade. American Tungsten(TSX-V:TUNG) is working to restart the historic Ima Mine in Idaho, a former tungsten producer that operated during and after the Second World War. In Nevada,Western Star Resources(CSE:WSR) is advancing another tungsten project with a history of wartime production. Across the border in New Brunswick,Northcliff Resources(TSX:NCF) is developing the Sisson Project, one of the world’s largest undeveloped tungsten deposits. Makenita Resources(CSE:KENY) is also exploring in the area around Sisson, where it is preparing drilling to test for additional tungsten mineralisation. Further north,Rackla Metals(TSX-V:RAK) is exploring the past-producing Cantung area in the Northwest Territories, home to historically high-grade tungsten skarn mineralisation. As erbium’s latest price surge shows, even relatively small critical mineral markets can quickly become strategically important when supply is concentrated in a handful of countries. Write toJackson ChenatMining. com. auImage:WikipediaAdd to Watch List: