SmCo Magnet Availability and Cost Outlook: Understanding Today’s Supply Challenges

November 3, 2025

The global market for samarium cobalt (SmCo) magnets is under exceptional pressure. A convergence of export controls, raw material restrictions, and cost volatility is reshaping how these high-performance magnets are sourced and priced. This update summarizes the current conditions influencing availability, outlines the outlook for the next year, and explains how Dura Magnetics is managing these developments to support its customers.

Chinese Export License Requirements

In April 2025, China’s Ministry of Commerce (MOFCOM) issued Announcement No. 18, establishing new export license requirements for samarium, dysprosium, terbium, and related alloys. What began as a regulatory formality has evolved into a process marked by long reviews, inconsistent documentation demands, and increasing scrutiny of end-use declarations. According to Reuters (October 14, 2025), industry sources report that export license approvals for rare-earth magnets have slowed dramatically, with many applications delayed or denied. Legal analyses from Mayer Brown and White & Case explain that the review scope now extends to any magnet potentially classified as dual-use, meaning those suitable for both commercial and defense-related applications. For U.S. companies, the result is a de facto bottleneck. Dura and other importers must submit detailed end-user and end-use certificates for each line item in a purchase order. These certificates are reviewed by provincial MOFCOM offices before export clearance, a process that can extend 45 to 60 days and often expires before approval, requiring resubmission.

DFARS-Compliant Alloy Constraints and the Undeliverable Alloy Event

Magnets for defense programs remain exempt from Chinese export licensing because they are produced from non-Chinese sources, but the DFARS-compliant SmCo alloy supply chain has its own challenges. Western mills are restricted from purchasing new Chinese feedstock, and many are struggling with input purity. Producing high-energy SmCo alloys requires refined rare-earth oxides that have been almost entirely processed in China.

In mid-2025, a leading Western alloy producer was manufacturing SmCo ingots under a commercial contract placed in the second quarter. The alloy was produced in the third quarter using samarium that had been legally purchased from China earlier in the year. At that time, the alloy qualified under DFARS 252.225-7018 and DFARS 252.225-7052 because the final magnet production was outside of China and the supply chain met the 2019 National Defense Authorization Act requirements through 2026.

However, MOFCOM’s Announcement No. 18 of April 4, 2025, followed by Notice No. 61 on October 9, 2025, expanded China’s export control authority to include restrictions on the use of Chinese-origin minerals in dual-use or military applications. Once this clarification was issued, the producer was contractually required to block shipment of the ingots, even though they were manufactured and alloyed in the West. The minerals’ Chinese origin alone rendered the material undeliverable. This event is significant because it demonstrates the far-reaching control MOFCOM now exerts over the rare-earth supply chain. A contractually compliant and legally

manufactured DFARS alloy became unsellable due solely to the origin of its input materials. The incident highlights the new reality: compliance with U.S. sourcing rules does not guarantee freedom to transact if the upstream feedstock originated in China.

U.S. Government Support Limitations

The recent U.S. government shutdown temporarily halted operations of the International Trade Administration, interrupting advocacy and information support for companies managing Chinese export-license requirements. Baker McKenzie reported that the closure affected multiple trade agencies, including those that assist exporters and importers with compliance documentation. This pause removed an important communication channel at a critical time for the magnet industry.

Cobalt Cost Increases

Cobalt, the essential transition metal in SmCo magnets, has experienced steady price escalation throughout 2025. Supply disruptions in the Democratic Republic of Congo and increased demand from electric vehicle battery manufacturers have tightened availability. As shown in Dura’s previous cobalt-market analysis, benchmark prices rose sharply through mid-2025 and are projected to remain elevated into 2026. This cost trend directly impacts SmCo magnet pricing, since cobalt represents roughly 30 percent of the alloy by mass.

The Path Forward

Looking ahead, analysts expect Chinese and U.S. trade administrations to eventually stabilize the export-license process, though near-term relief appears unlikely. Even as MOFCOM refines its licensing practices, exporters will continue to scrutinize end-use declarations for any perceived defense relevance. At the same time, Western refiners are working to develop new processing capability for heavy rare earths, but the progress remains incremental and will take several years before meaningful volume is realized. Until both conditions mature, a predictable license regime and expanded non-Chinese refining capacity, SmCo magnet availability will remain constrained and pricing elevated.

What Dura Magnetics Is Doing

Dura Magnetics continues to take structured action to safeguard customer supply and ensure transparency.

• Inventory Buffering: Dura is expanding safety-stock levels of SmCo materials as availability allows to buffer against extended licensing delays.
• Supplier Verification: The company audits non-Chinese mills to confirm mineral origin and processing transparency. The undeliverable-alloy event has reinforced Dura’s vigilance in validating upstream feedstock sources before placing orders.
• Lead-Time Transparency: All quotations now include updated lead-time projections and tariff-contingency language, allowing customers to plan production schedules with clarity.
• Cross-Functional Oversight: Dura’s Tariff and Export Teams monitor developments daily, working with Chinese vendors to keep export-license applications moving and to identify early warning signs of shipment disruption.- Customer Communication: Ongoing correspondence and website updates provide factual, up-to-date insights into supply conditions, helping customers anticipate potential impacts before they reach production.

Outlook for Customers

While the global magnet market remains volatile, Dura Magnetics’ structured approach and deep industry relationships allow it to maintain continuity of supply. The company remains committed to providing transparency, technical collaboration, and long-term stability. Customers can rely on Dura to continue balancing compliance, cost management, and reliability as the rare-earth supply chain evolves.

About Dura Magnetics

Dura Magnetics, Inc. is a U.S.-based designer and manufacturer of permanent magnet solutions serving aerospace, defense, medical, and industrial sectors. With AS9100D certification and ITAR registration, Dura combines materials expertise, engineering support, and supply-chain integrity to help customers achieve reliable magnetic performance under demanding conditions.

References:
Reuters (Oct 14 2025); Mayer Brown (Oct 2025); White & Case (Oct 2025); Hudson Institute (Sept 2025); Baker McKenzie (Oct 2025); MOFCOM Announcement No. 18 (Apr 4 2025); MOFCOM Notice No. 61 (Oct 9 2025).