Executive summary (20-second highlights):

Most readers took last week's rare earth headline the way it was delivered: good and friendly Trump-Xi discussions, and two more months.

On September 23rd, 2026 ahead of the diplomats’ meetings, Treasury Secretary Scott Bessent told Fox News that the US–China truce agreed last October would stay in effect until January 10th, 2027, instead of expiring on November 10th, 2026, as expected.

President Xi arrived in the United States for a state visit the next day.

And on September 28th, China time, an official of China's commerce ministry put the date in writing: the Kuala Lumpur arrangement, which suspended "part of each side's tariff and non-tariff measures" until November 10th, 2026, is extended to January 10th, 2027 (as per MOFCOM’s announcement), to give companies "a relatively stable and predictable policy environment" (our translation using AI).

That sounds settled, but in reality it is less settled than it sounds (you’ll soon spot the catch).

China did not suspend its October 2025 rare earth controls by statement. It did it by notice: Ministry of Commerce and customs Announcement No. 70 of 2025, dated November 7th, 2025, which suspended six earlier announcements (Nos. 55 to 58, 61 and 62) from that day "until November 10, 2026". As of September 28th we can find no notice amending that date, and the ministry's September 28th statement does not mention rare earths or export controls.

The two official summit documents do not supply a date either. China's list of eight outcomes, published by its foreign ministry on September 26th, endorses "the extension of the outcomes of economic and trade consultations in Kuala Lumpur". It gives no date and does not mention rare earths. The White House fact sheet of September 25th gives no date either, and says this about the material:

"The United States and China continue to work on U.S. concerns regarding supply chain shortages related to rare earths and other critical minerals, with the goal of ensuring shipment levels return to appropriate levels."

Two things sit inside that sentence:

So the January 10th date now lives in an interview and a ministry statement that names no rare earths, while the Chinese legal text still reads November 10th.

We expect a notice, and until one appears, the date is policy rather than law, and a holder treating it as law is taking a small risk that does not appear to be priced.

Now suppose January 10th holds. The more consequential point is where it lands, because nine days earlier the United States changes its own rule.

US defense contracts above the simplified acquisition threshold carry a clause called DFARS 252.225-7052. It lists five covered materials: Samarium-Cobalt magnets, Neodymium-Iron-Boron magnets, Tantalum metals and alloys, Tungsten metal powder and Tungsten heavy alloy. The covered countries are North Korea, China, Russia and Iran.

Through December 31st, 2026, the clause stops a contractor delivering covered material "melted or produced" in a covered country, or an end item made there that contains it. From January 1st, 2027, paragraph (b)(1)(ii) reads in full:

"Effective January 1, 2027, the Contractor shall not deliver under this contract any covered material mined, refined, separated, melted, or produced in any covered country, or any end item, manufactured in any covered country, that contains a covered material"

Three words are new: mined, refined, separated.

For a magnet, they reach back past the magnet factory, past the metal maker, to the separation plant and the mine.

And let’s briefly recap, the routine way around the clause was also closed on the same day with the Executive Order 14415, which says it plainly: "On January 1, 2027, the Secretary of War (Secretary) and the Secretaries of the military departments shall cease to issue waivers under 10 U.S.C. 4872(c)(1) for the acquisition of covered materials under 10 U.S.C. 4872", except through a formal mitigation plan.

Of course, the Rare Earths market is broad and not limited to Defense (and the U.S. imposed restrictions cover North Korea, China, Russia and Iran).

Start with who is left.

The clause binds defense deliveries of five covered materials, and even inside defense it carries exceptions:

Everything else in the economy that uses a rare earth magnet (cars, wind turbines, industrial motors, appliances, data-centre cooling) can take Chinese-mined material on January 1st and after. Those buyers stay exposed to China's licence. The defense buyer has already been moved off it by his own government.

That is also where China's allocation has been pointing, and our own customs series now shows it through August.

Small disclosure: the numbers below come from our compiled Chinese customs file, line by line, not from press accounts of the release.

Focus first on the volumes, because it removes one explanation before it starts: In the first eight months of 2026 China exported 41,892 t of rare earth permanent magnets.

That is the most for any January to August in our series, which begins in 2015: up 23% on the same months of 2025 and up 10% on 2024.

In other words, China is not short of magnets to sell (at all).

The United States received 4,033 t of them. That is 9.6% of the total, the smallest January to August share in the series. Between 2019 and 2023 the American share averaged 13.1%.

At its 2019 to 2023 share of this year's total, the United States would have received about 5,489 t of magnets by the end of August. It only received 4,033 t, about 1,460 t fewer, or 27% below its usual share.

That is arithmetic on a historical ratio, not a forecast, but it gives the allocation a size.

And if the total export is growing and some are receiving less, someone else must be receiving more, right?

Against the same months of 2024, the American share fell 3.2 percentage points and Poland's 1.7. South Korea and India each gained 1.2 points, Germany 1.0, Thailand 0.6 and Vietnam 0.5.

August, the month before the Trump-Xi summit, shows the lever moving.

Shipments to the United States were 512 t, down 21% from 647 t in July. Shipments to Japan were 212 t, up from 111 t in July: the first month above 200 t since February. South Korea took 530 t, more than the United States. Total magnet exports were 5,011 t.

Last but not least, the prices: each customs line carries a declared value, so the value divided by weight gives us a unit value by destination.

Across January to August 2026, magnets declared for the United States came to US$55.3/kg, against US$50.4/kg for Germany: 9.6% higher. In the same months of 2024, American buyers paid 9.7% less than German buyers (US$45.6/kg against US$50.5/kg). In August the gap was US$64.2/kg against US$52.1/kg.

A unit value is not a price quote. A shift toward higher-grade magnets would raise it too, and the customs line cannot separate the two.

Japan shows the second layer of the same lever.

It can still buy the finished magnet: 1,392 t in the first eight months of 2026, level with the same months of 2025.

But it cannot buy the ‘heavy ingredients’.

Our series records no Chinese export of Terbium oxide, Terbium metal, Dysprosium oxide or Dysprosium metal to Japan in any month of 2026 through August; the last Terbium oxide shipment was in November 2025. Yttrium oxide to Japan fell to 14.1 t in January to August, against 836.8 t in the same months of 2025.

South Korea, next door, received 35.9 t of Dysprosium oxide, 10.0 t of Terbium oxide and 309.7 t of Yttrium oxide over the same eight months.

On our reading, China is selling Japan the product and withholding the inputs a Japanese magnet maker would need to make high-temperature grades itself. The United States received no Terbium or Dysprosium oxide or metal in 2026 either, and 109 t of Yttrium oxide.

So the lever works at two layers. The destination decides how many finished magnets arrive, and the product line decides whether a buyer can make his own. In the month before a summit, the tonnes moved away from the negotiating counterparty and toward the ally that had been cut hardest, while the feedstock stayed where it was. It is the thing the White House now says it wants to measure.

Here is the sequence the two governments have now built, in order.

On February 2nd, 2026, the Export-Import Bank of the United States (EXIM) approved a direct loan of up to US$10bn to Project Vault, which it described as "an independently governed public‑private partnership", with Clarios, GE Vernova, Western Digital and Boeing among the manufacturers named and Hartree, Mercuria and Traxys as suppliers. Nearly US$2bn of private money sits beside the loan.

On September 23rd (~8 months later), the operating company, VaultCo, moved to execution:

Now let's have a look at what was not published:

Walk the machine one step at a time.

The trader decides what gets bought, from whom, and at what price. The manufacturer decides when it comes out. The state decides whether to lend. And the price at which a tonne enters the vault is agreed between two private parties and printed nowhere.

Compare the other ways a government can buy. A price floor publishes its number: US$110/kg for NdPr is on the record. The Defense Logistics Agency's Lithium solicitation published its volume (up to 16,167 t over five years), its ceiling (US$300M) and its bid deadline, and when the agency cancelled it in August after two extensions, that was public too. A vault run by traders publishes a total and a name.

In CW37 we argued that, in an election year, the support that survives is the kind whose cost does not reach a price a voter sees.

And if we think about it, a stockpile ought to fail that test, because buying material raises its price.

It only passes it by keeping the price private, adding physical demand for whatever it buys without adding a number anyone can model.

Then there is the executive order again.

Section 6 of Executive Order 14415 is titled "Project Vault and U.S. Funded Sources", and it opens: "Nothing in this order shall be construed to impair or otherwise affect the U.S. Strategic Critical Minerals Reserve (also known as 'Project Vault') for which the Export-Import Bank of the United States is a lender".

Paragraph (b) adds that a sale of critical materials or components "by Project Vault to a contractor or subcontractor" shall not be construed as a credit sale of a defense article for the purposes of EXIM's own statute.

So the President's sourcing order contemplates the vault selling to defense contractors, and exempts it.

But the defense clause from the first part of this edition is not a creature of the order. DFARS 252.225-7052 is a contract term resting on statute, and nothing in Section 6 amends it.

On our reading, which is not a legal opinion or advice by all means, a Neodymium magnet sitting in the vault with rare earths separated in China still cannot be delivered under a defense contract after January 1st, whoever sells it. At least one of the manufacturers EXIM named, Boeing, is also a major defense contractor.

That puts two different inventories under one roof:

Meanwhile China spent the same week building the opposite kind of institution.

The Guangzhou Futures Exchange (GFEX) plans physically settled Lithium hydroxide futures as early as this year, now pending approval, with Ganfeng, Tianqi, Chengxin, Jinzhou Yongshan and Sichuan Yahua applying as delivery depots. China has become a net importer of hydroxide and is responding with a public price.

And the producers are moving toward the traders: Rio Tinto plans to expand its trading business into third-party material and derivatives, including Copper cathode and sulphuric acid.

Read the last three columns down. The one public price in the table is Chinese.

For a portfolio, that is a change in where the premium can be seen, not a direction. A supplier selling into the vault may earn more than the benchmark, but the only place that shows up is its own results, a quarter later. The benchmark an analyst models from stays blind to the largest new Western buyer in the market.

What this framing may be underweighting:

What would change this read, each item dated and checkable:

The only commodity in the summit fact sheet with a tonnage was coal. The White House fact sheet says China "will import at least 10 million metric tons of coal from the United States in 2027 and again 2028". Rare earths got "appropriate levels". A negotiation that can put a tonnage on what the United States sells and cannot put one on what China controls suggests which side held the pen on each line.

The world's largest magnet maker holds a general licence. Bloomberg reported on September 21st that JL Mag, which plans to lift annual capacity by half to 60,000 t next year, was among the first Chinese companies granted a general export licence when China's controls disrupted manufacturers last year. For JL Mag's customers the licence has not been the constraint for some time. What they depend on is allocation, which no licence tally measures.

Western and Chinese rare earth producers fell together on the extension. On September 24th, Reuters reported Shenghe down 2.1%, China Northern Rare Earth and China Rare Earth down 1.1%, Lynas down 2% and Iluka down 0.5% after the truce was extended. A premium for supply outside China should move against Chinese producers on news of easier Chinese supply. That day it moved with them, which suggests the market still trades the whole group as one rare earths position.

Higher-assay reactor fuel is now a commercial product. Framatome announced on September 22nd its first commercial contract for fuel enriched above the 5% industry standard, for an undisclosed operating US reactor, with deliveries from early 2028. Fuel enriched further takes more enrichment work per tonne, and it arrives while the allied capacity meant to replace Russian supply is still years from full build-out.