Samarium prices in North America can reach 346 times the level in China, underscoring regional disparities in rare-earth supply and a potential raw-material bottleneck for the expanding U.S. magnet industry. Rare-earth magnets are used in jet engines, industrial motors, electric vehicles, wind turbines and medical scanners, yet U.S. manufacturers remain heavily reliant on Chinese supply. As investment accelerates in mines and magnet plants, the intermediate step of converting oxides into metals and then alloys for magnets could become a weak link in the supply chain.
Metal capacity lags planned magnet expansion
Canaccord Genuity estimates that China controls more than 90% of the world’s roughly 210,000 tonnes of rare-earth metalization capacity, describing the process as a clear gap in efforts to build Western supply chains. Equipment for strip-cast alloy production can take up to two years to deliver. The firm’s channel checks also indicate that export controls are making it difficult to source this equipment from China.
By 2030, magnet capacity outside China is forecast to reach about 70,000 tonnes, more than three times current levels. But non-Chinese capacity for metals and alloys is expected to total only around 38,000 tonnes over the same period—roughly half the requirement of the new magnet plants. If that gap persists, new production lines may have to rely on Chinese feedstock or compete with other Western plants for limited alternative supplies.
U.S. manufacturers buy about 48,000 tonnes of rare-earth magnets a year, while domestic output was only around 300 tonnes in 2025. ING says the constraint on rare-earth supply is primarily a lack of industrial processing capacity, rather than a shortage of deposits. The U.S. government has agreed to a 10-year deal with MP Materials under which the Department of Defense will set a floor price of $110 per kilogram for neodymium-praseodymium (NdPr). If the benchmark price falls below that level, the government will cover the difference to support production.
REalloys targets metal and alloy processing
Nasdaq-listed REalloys says its plant in Euclid, Ohio, is producing rare-earth metals, alloys and magnet materials. The company says it has North America’s only operating heavy rare-earth metalization capability. It plans to expand capacity linked to the Saskatchewan Research Council and says it has secured rights to about 80% of the expanded output, including approximately 525 tonnes of NdPr metal a year, as well as dysprosium and terbium products. REalloys has also signed a 15-year offtake agreement with Critical Metals covering 15% of output from the first phase of its Tanbreez project in Greenland.
Under a U.S. Defense Logistics Agency contract, REalloys is designing a facility capable of producing 300 tonnes of samarium and gadolinium metals annually. The company says neither material currently has established commercial-scale production in the United States. REalloys reported cash of $122.4 million as of the end of June and says funding is in place for the Saskatchewan project and its metalization expansion. These capacity, funding and supply arrangements are company-reported plans or rights; project timelines and actual output will determine whether they can help close the supply gap.
Higher demand forecasts keep heavy rare earths in focus
Canaccord forecasts global demand for rare-earth magnets could reach 365,000 tonnes a year by 2035, raising its previous estimate by 15%. The firm expects demand for neodymium-iron-boron magnets to grow by an average of 7.3% annually, with electric-vehicle sales rising from 23.5 million this year to 52 million in 2035. Data centers, e-bikes, scooters and drones could also add to demand. Analyst Reg Spencer said drones currently account for about 1% of forecast demand, though estimates remain uncertain.
The firm also projects humanoid-robot deliveries will grow at an annual rate of 45% to 2.5 million units by 2035. It cited reports that Tesla is preparing a production line with annual capacity of 1 million Optimus robots. McKinsey research estimates annual demand for dysprosium and terbium will rise by about 8.8%. If these forecasts are borne out, they would add to demand for the rare-earth metals and alloys used in high-performance magnets.
Canaccord estimates the NdPr market will face a supply deficit of about 7% this year, with shortages potentially continuing through 2028. New mines and refineries in Australia, Malawi, Brazil and Utah, alongside Lynas’ expansion, could bring the market close to balance around 2029–2031. The firm nevertheless forecasts the deficit widening again to 10% by 2035, while shortfalls in dysprosium and terbium could reach 12%.
The International Energy Agency expects demand for magnet rare earths outside China to rise by 50% by 2035. It has warned that non-Chinese metalization and magnet-making capacity could still fall short even if every announced project goes ahead. The supply challenge therefore depends not only on whether new mines and magnet plants are built, but also on whether intermediate processing capacity expands in step.