Terbium

China's April 2025 Export Licensing: Terbium as the Hardest-Hit Heavy Rare Earth

Announcement No. 18 of 2025: the legal mechanism

China's Ministry of Commerce and General Administration of Customs jointly issued Announcement No. 18 of 2025, placing terbium under control category 1C904 with three sub-classes: 1C904.a covers terbium metal (customs code 2805301300), terbium-cobalt and terbium-cobalt-iron alloys, terbium and terbium-cobalt alloy targets, and — critically — terbium-containing NdFeB permanent magnet materials; 1C904.b covers terbium oxide and its mixtures (codes 2846901600, 2846901993, 3824999922); and 1C904.c covers terbium-containing compounds and mixtures across nine additional customs codes (MOFCOM Announcement No. 18/2025). The controls took effect 4 April 2025 and require exporters to obtain a license from the State Council's commerce authority under the Export Control Law and the Regulations on Export Control of Dual-Use Items before any shipment; customs officials may question and hold goods pending verification of declared control numbers (MOFCOM Announcement No. 18/2025).

Seven elements, one basket, tied explicitly to the tariff dispute

Terbium was one of seven medium and heavy rare earths — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — placed on the control list on 4 April 2025, alongside related permanent magnets, as part of China's response to new U.S. tariffs (Reuters, 4 Apr 2025). USGS's own heavy-rare-earths chapter confirms that in April 2025 “China tightened its export controls on rare-earth elements, adding specific controls on metals, oxides, alloys, and compounds of terbium, dysprosium, lutetium, and other rare earths” (USGS MCS 2026, rare earths (heavy) chapter). The European Parliament's own resolution records that China “cited dual-use and security considerations as justification” for a licensing system covering medium and heavy REEs including terbium (European Parliament resolution, 14 Jul 2025).

October 2025 expansion, then a one-year suspension — but not for terbium's April controls

In early October 2025, China expanded export controls to cover the remaining heavy rare earths (holmium, erbium, thulium, europium, ytterbium), initially set to take effect 8–10 November 2025 (China Briefing, 10 Nov 2025). Following the Trump-Xi meeting at the October 2025 APEC summit in Busan, China suspended this second wave for one year, through 10 November 2026 (S&P Global Market Intelligence, 22 Jun 2026). Crucially, the original April 2025 terbium controls under Announcement No. 18 were not part of the suspension and remain fully in force, though China has since begun issuing general export licenses to selected exporters (USGS MCS 2026, rare earths (heavy)). A separate October 2025 measure, Announcement 61, extended China's extraterritorial reach by requiring foreign entities anywhere in the world to obtain a MOFCOM dual-use export license before re-exporting Chinese-origin rare-earth materials, explicitly naming terbium oxide (Tb₄O₄) and terbium-iron alloy among the 13 specified controlled items (White & Case, 13 Oct 2025).

Volume impact: exports still roughly half of pre-control levels

More than a year after the controls took effect, Chinese exports of yttrium, dysprosium, and terbium “remain about 50% below pre-April 2025 control levels,” with Japan receiving only 4% of its prior 12-month dysprosium import volume and Germany reportedly receiving none (MOFCOM — China Ministry of Commerce (rare earth export controls)). Argus-reported data cited in the same analysis shows dysprosium and terbium prices outside China rising four- to five-fold since April 2025, and yttrium roughly 140-fold (MOFCOM — China Ministry of Commerce (rare earth export controls)).

Prices: A Two-Tier Market and the Most Volatile Rare Earth Since 2022

USGS annual average price series, 2021–2025

Source: USGS MCS 2026, rare earths (heavy) chapter. Note the divergence in direction between the two elements in 2025: terbium's annual average rose year-on-year even as dysprosium's continued to fall, reflecting terbium's thinner absolute market size and its outsized sensitivity to the licensing shock.

The 2025 spike and the two-tier China/export gap

Independent price trackers put pre-control late-2024 terbium oxide (Tb₄O₄) prices at roughly $600–700/kg domestically in China versus $980–1,100/kg FOB China for export material. Following the April 2025 controls, Chinese rare earth magnet exports fell roughly 75% in the April–May 2025 window, and the two-tier pricing structure — a materially cheaper domestic Chinese price alongside a much higher FOB-China export price — became entrenched, with the gap reported at approximately $804/kg domestic versus $1,182/kg FOB China (a 47% premium) by March 2026 (Lanthanides.io Strategic Materials Ledger, terbium, Mar 2026). Benchmark Mineral Intelligence, cited in the same compilation, projects the domestic-to-export gap will widen further, from roughly 4.4× in 2025 to 8.3× by 2027, and separately notes European spot terbium prices have reached three to six times Chinese domestic levels (Lanthanides.io, citing Benchmark Mineral Intelligence).

Source: Lanthanides.io, Terbium Price 2026, compiling Shanghai Metals Market, Argus, and Fastmarkets data.

Magnitude of the 2025 spike vs. other heavy REEs

Independent analyst reporting shows heavy REE prices surged sharply following the effective date of the controls: yttrium +598%, terbium +195%, and dysprosium +168%, tracked over comparable windows in 2025 (Christopher Sanchez & Co., GeoCoded Special Report, 21 Aug 2025). By May 2026, an Oregon Group summary of Argus data (as reported by Reuters) put ex-China terbium oxide near $4,500/kg and dysprosium oxide near $1,450/kg, while yttrium oxide had risen roughly 140-fold to near $1,100/kg (China Ministry of Commerce (MOFCOM)). Separately, an April 2026 market note from Perth Critical Minerals Report priced Chinese-domestic terbium oxide at $778.67/kg versus dysprosium oxide at $179.48/kg — a ratio above 4:1, which the same source describes as the entrenched terbium/dysprosium price relationship magnet makers use when blending the two heavy REEs (Perth Critical Minerals Report, 30 Apr 2026).

New formal benchmarks: Fastmarkets launches a global CIP assessment

Historically, terbium had no exchange-traded futures contract and relied on price-reporting-agency assessments (Argus, Shanghai Metals Market, Fastmarkets/Metal Bulletin) rather than an LME- or LBMA-style formal benchmark. On 19 March 2026, Fastmarkets launched a new global benchmark, MB-TB-0004, “Terbium oxide 99.99% CIP global, $/kg”, alongside CIP-global assessments for other heavy rare earths, explicitly citing Chinese export controls and reduced heavy-rare-earth supply to Japan as having “the potential to permanently change the rare earth market” (Fastmarkets, 20 Mar 2026; Fastmarkets, 18 Mar 2026). Fastmarkets also maintains an ex-warehouse Rotterdam terbium oxide assessment (MB-TB-0003) and an fob-China terbium metal assessment, giving the market its first parallel domestic-vs-export price curve pair (Fastmarkets, terbium oxide ex-whs Rotterdam; Fastmarkets, terbium oxide CIP global).

End Uses: From a Legacy Lighting Phosphor to the Metal That Keeps EV Motors Cool

High-temperature NdFeB magnet doping: the dominant and fastest-growing use

Standard sintered NdFeB magnets lose magnetic performance — specifically coercivity, the resistance to demagnetization — above roughly 80–100°C. EV traction motors and direct-drive wind turbine generators routinely operate at 150–200°C, well past that threshold (Rare Earth Mining News, terbium uses, 10 Apr 2026). Terbium is added to the NdFeB alloy alongside dysprosium, typically at 0.1–0.5% by weight in high-performance motor grades (versus 1–5% for dysprosium), to raise coercivity and maintain magnetic performance above 150°C (AIC Magazine, NdFeB magnet raw materials explainer). Per unit weight, terbium is a more potent coercivity enhancer than dysprosium, which is why it is used selectively “where Dy availability or cost is a constraint” even though it typically costs several times more (AIC Magazine). Grain boundary diffusion — depositing Dy or Tb only at grain boundaries rather than throughout the magnet — is the primary engineering response, cutting total heavy-REE consumption per magnet by roughly 30–50% while preserving coercivity, and has been deployed at scale by major Japanese magnet makers (Perth Critical Minerals Report, 30 Apr 2026).

Terbium-doped phosphors: the declining but not-yet-extinct legacy use

Before the EV-magnet boom, tri-phosphor fluorescent lighting was terbium's largest single application. Terbium-activated green phosphors — commercially, terbium-doped lanthanum cerium phosphate, (La,Ce)PO₄:Tb — generate the sharp 543–545 nm green emission line central to the warm-white spectrum of triphosphor fluorescent lamps and compact fluorescent lamps (Rare Earth Mining News, terbium uses). Lawrence Livermore National Laboratory notes that fluorescent lighting phosphors as a category “consume more than 1,000 metric tons of rare-earth oxides yearly, including europium, terbium, cerium and lanthanum,” and that a GE/LLNL/Oak Ridge National Laboratory research program funded by the U.S. Department of Energy has developed a next-generation green phosphor that “reduces the Tb content by 90 percent” specifically to relieve rare-earth supply pressure (Lawrence Livermore National Laboratory, 11 May 2025). LED adoption has been the primary demand destroyer: U.S. CFL shipments fell 28% year-on-year while LED sales rose 237%, and major retailers (IKEA) and manufacturers (GE) have exited CFL production entirely, with GE stating “I can see clearly now that LED is my future” (National Geographic, 23 Nov 2025). The decline is gradual rather than abrupt: legacy fluorescent infrastructure in commercial, industrial, and public-sector buildings across Asia, Africa, and Latin America continues to generate replacement-lamp demand, and terbium recovered from end-of-life fluorescent lamps remains one of the more commercially active rare-earth recycling streams globally (Rare Earth Mining News, terbium uses). Terbium-doped phosphors retain a narrow, higher-value niche in specialist LED lighting requiring very high color-rendering-index ratings — retail display, medical, and museum lighting — even as mainstream white LEDs use cerium-doped YAG phosphor chemistry instead (Rare Earth Mining News, terbium uses).

Terfenol-D magnetostrictive alloy: sonar, actuators, and precision positioning

Terbium comprises roughly 30% by weight of Terfenol-D (Tb_0.3Dy_0.7Fe₂), the highest-performance commercially available magnetostrictive material, exhibiting giant magnetostriction of up to 2,000 parts per million at room temperature — roughly five to ten times the strain of piezoceramic materials of equivalent size (Terfenol-D technical reference; Rare Earth Mining News, terbium uses). Developed in the 1970s by the U.S. Naval Ordnance Laboratory, with efficient manufacturing technology developed in the 1980s at Ames Laboratory under Navy funding, Terfenol-D was purpose-built for high-power sonar transducers offering greater bandwidth and reliability than legacy piezoceramic systems (Terfenol-D, Wikipedia technical summary). Naval sonar — particularly hull-mounted and towed-array systems — is the largest single demand source, with global annual Terfenol-D alloy production estimated in the low hundreds of tonnes, implying terbium consumption in this application in the range of roughly 30–80 tonnes per year (Rare Earth Mining News, terbium uses). Beyond sonar, Terfenol-D actuators are used in precision linear positioning, hydraulic valve drivers, diesel fuel injectors, vibration damping, and ultrasonic cleaning equipment, and the alloy is explicitly classified as a strategic material by several Western defense agencies (Rare Earth Mining News, terbium uses). Substitutability for Terfenol-D specifically is very low: “no alternative material delivers equivalent magnetostrictive…performance at comparable cost” (Rare Earth Mining News, terbium uses).

Magneto-optic and laser niches

Beyond magnets, phosphors, and Terfenol-D, terbium compounds serve smaller but technically important niches: terbium gallium garnet (Tb₃Ga₅O₁₂) and terbium aluminum garnet are used as magneto-optical Faraday-rotator materials in optical isolators for high-power laser and fiber-optic systems, terbium fluoride is used in fluoride-glass and electroluminescent thin-film production, and terbium compounds appear in solid-state and scintillator applications (Terbium compounds, technical reference). As with Terfenol-D, substitutability in Faraday-rotator components is characterized as very low, since no alternative material matches terbium garnet's combination of Faraday rotation and optical transparency at comparable cost (Rare Earth Mining News, terbium uses).

Supply Chain: Ionic Clays in Southern China and Myanmar's Kachin State

Ion-adsorption clays: the only commercially viable terbium ore type

Unlike light rare earths, which are concentrated in hard-rock bastnaesite deposits (Bayan Obo, Mountain Pass), heavy rare earths including terbium occur almost exclusively in ion-adsorption clay (IAC) deposits, where rare-earth ions are loosely and weakly bound to clay particles and can be extracted through in-situ or heap leaching with ammonium sulfate solution — a low-cost but environmentally damaging process (National University of Singapore, EAI Background Brief No. 1843, 12 Sep 2025). These clays are “overwhelmingly concentrated in southern China and parts of northern Myanmar,” and outside those two source regions “most known HREE deposits are small, lower grade, more radioactive, or in environmentally prohibitive regions” (NUS EAI Background Brief No. 1843). Within China, the ionic clay deposits are concentrated in Jiangxi, Guangdong, and Fujian provinces, consolidated under the state-owned China Rare Earth Group (formed in 2021 through the merger of six state producers), which together with China Northern Rare Earth's light-REE operations forms China's dual state quota system (Rare Earth Mining News, top Asia rare earth projects, 15 May 2026).

Myanmar's Kachin State: China's offshored heavy-REE feedstock base

China's own domestic ionic clay resources in Jiangxi and Guangdong are aging and grade-depleted; Myanmar's Kachin State deposits emerged as the substitute feedstock, supplying “two thirds of the heavy rare earth elements terbium and dysprosium processed in China” according to Chinese customs data (Heinrich Böll Stiftung, 6 May 2026). Global Witness's analysis of Chinese customs data found Myanmar supplied approximately 41,700 tonnes of heavy rare earth oxides to China in 2023 — more than double China's own domestic mining quota that year and roughly 98% of China's heavy-REE-oxide imports (Asialink, University of Melbourne, 19 May 2026). Mining site counts in Kachin State grew from roughly 130 in 2020 to at least 370 by 2025, per satellite analysis from the Institute for Strategy and Policy–Myanmar (The Diplomat, 14 Oct 2025). USGS's own MCS 2026 country tables record Myanmar production of rare earths at 27,000 tonnes in 2024 and 22,000 tonnes in 2025, while listing its reserves as not available, underscoring how opaque and informally governed this supply base is (Asialink, citing USGS MCS 2026).

Conflict disruption and price transmission into terbium

In October 2024, the Kachin Independence Army seized Chipwi and Pangwa, two towns at the center of one of the world's most valuable heavy-REE concentrations, prompting China to close border gates along the Yunnan corridor and halt shipments; a December 2024 negotiated settlement introduced a new 20% KIA levy on exported rare-earth concentrate (Stimson Center, 4 May 2026). By February 2025, Chinese imports of rare-earth compounds from Myanmar had plunged, and Shanghai Metals Market data showed terbium oxide prices rising over 27% in the following six months amid the disruption (Reuters, 12 Jun 2025). Between 2017 and 2024, Myanmar exported over 290,000 tonnes of rare-earth material to China worth more than $4.2 billion, with 85% of that value generated after the 2021 coup, and Myanmar accounting for over 60% of China's heavy-REE import value in recent years (Stimson Center, 4 May 2026).

Refining and processing: China Rare Earth Group's near-total separation monopoly

China Rare Earth Group's Ganzhou, Jiangxi operations refine the majority of the world's heavy rare earths through solvent-extraction and ion-exchange circuits that split mixed rare-earth solutions into individual oxides, including terbium (Rare Earth Mining News, China Southern Rare Earth profile, 27 Mar 2026). Concentrate trucked north from Myanmar through border crossings such as Pangwa enters established refining hubs in Jiangxi, Guangdong, and Inner Mongolia (Materials Dispatch, 11 Mar 2026). Some estimates place China's share of global heavy-REE separation capacity as high as 98 to 99%, a share materially higher than its share of raw mining, because Myanmar and other feedstock sources have no domestic separation infrastructure of their own (Asialink, University of Melbourne; Rare Earth Exchanges, 21 Jul 2025).

Building a Non-Chinese Terbium Supply Chain: Lynas, MP Materials, Serra Verde

Lynas Rare Earths: first mover on separated heavy REEs outside China

Lynas Malaysia (the Lynas Advanced Materials Plant, or LAMP, in Kuantan, Malaysia) began commercial separation of heavy rare earths — including dysprosium and terbium — in May 2025, becoming the first company to produce separated heavy REEs outside China (The Edge Malaysia, 16 May 2025; Argus Media, 16 May 2025). Lynas's own about-us materials confirm ongoing separated dysprosium oxide and separated terbium oxide production at the Malaysian facility (Lynas Rare Earths, About Us). In October 2025, Lynas announced plans to build a new, larger heavy-rare-earth separation facility in Malaysia with capacity of up to 5,000 tonnes per annum of HRE feedstock, self-financed following a September 2025 equity raise at an estimated cost of roughly RM500 million (US$118 million), contingent on regulatory approvals; the facility's initial product suite is planned to include dysprosium, gadolinium, lutetium, samarium, terbium, and yttrium within roughly two years (Mining Technology, 29 Oct 2025). Independent tracking estimates Lynas produced roughly 26 tonnes of combined dysprosium and terbium in Q4 2025 and is targeting around 50 tonnes per year of terbium specifically once ramped (Lanthanides.io, Terbium Price 2026).

MP Materials: the DoD-backed Mountain Pass expansion into heavy REEs

MP Materials, operator of the sole active U.S. rare-earth mine at Mountain Pass, California, does not currently separate heavy rare earths from its bastnaesite-derived concentrate. On 10 July 2025 the company announced a “transformational public-private partnership” with the U.S. Department of Defense, including a $400 million DoD equity investment (making DoD the company's largest shareholder at roughly 15%), a 10-year $110/kg NdPr price floor, a 10-year offtake commitment for a new 10,000-tonne “10X” magnet facility, and — specific to heavy REEs — a $150 million DoD loan to expand heavy-rare-earth separation capabilities at Mountain Pass (MP Materials, Investor News, 10 Jul 2025). The unsecured 12-year loan, priced at the 10-year Treasury yield plus 1%, was formally disbursed in August 2025 through the Department of War's Office of Strategic Capital (San Bernardino County, 1st District, 14 Aug 2025). USGS confirms the loan's purpose directly: “In August, the U.S. Department of War (DOW) provided a rare-earths producer in Mountain Pass, CA, with a $150 million direct loan to construct a heavy-rare-earths separation facility” (USGS MCS 2026, rare earths (heavy) chapter). Analysts note the facility is designed for 3,000 tonnes/year of feed input with a dysprosium/terbium nameplate capacity of roughly 200 tonnes/year, commissioning targeted for mid-2026 — but MP Materials' own 2024 annual report acknowledges that “planned Heavy Rare Earth separation capabilities will still depend on feedstock imports” (NUS EAI Background Brief No. 1843, citing MP Materials 2024 Annual Report).

Serra Verde (Brazil): the only at-scale ionic clay producer outside Asia

Serra Verde's Pela Ema ionic clay deposit in Goiás, Brazil, began commercial production in early 2024 and produces a mixed rare-earth carbonate rich in dysprosium and terbium alongside neodymium and praseodymium — the first significant ionic-clay heavy-REE source outside Asia (Serra Verde Group, financing announcement, 5 Feb 2026). In November 2025, the U.S. International Development Finance Corporation approved a $465 million loan to expand production; the package was raised to $565 million by February 2026, including an option for the U.S. government to acquire a minority equity stake, and USGS explicitly cites the DFC action in its heavy-rare-earths chapter (USGS MCS 2026, rare earths (heavy) chapter; Mining.com, 5 Feb 2026). Serra Verde is targeting expansion from roughly 5,000 to 6,500 tonnes per year of total rare-earth oxide by end-2027, and in December 2025 terminated long-term Chinese offtake agreements roughly eight years early — ending in 2026 rather than the mid-2030s — explicitly to redirect supply toward Western buyers (Rio Times, 3 Apr 2026). On 20 April 2026, USA Rare Earth announced a definitive $2.8 billion agreement to acquire Serra Verde, structured with a 15-year offtake to a U.S.-government-and-private-investor-funded special purpose vehicle; analysts project Serra Verde could supply over 50% of non-China heavy-REE production outside Asia by 2027 (The Diplomat, 5 May 2026).

Recyclers and secondary entrants

Beyond primary separation, USGS records that in 2025 the Department of War provided an $80 million loan to a rare-earth recycler in Marion, Indiana, and awarded $5.1 million to a second recycler in Houston, Texas, both explicitly to recover rare earths “including terbium and dysprosium” (USGS MCS 2026, rare earths (heavy) chapter). Separately, Energy Fuels (a Colorado-based uranium miner pivoting into rare earths) reported production of its first kilogram of 99.9%-purity dysprosium oxide at its White Mesa Mill in Utah in August 2025, with terbium trial production beginning in December 2025 and commercialization of dysprosium, terbium, and samarium targeted for Q4 2026 (Moomoo, U.S. Rare Earths 2026 strategy weekly, 5 May 2026). Europe's contribution includes Neo Performance Materials' Sillamäe, Estonia facility, described by market trackers as Europe's first operational dysprosium/terbium oxide production line (Lanthanides.io, Terbium Price 2026).

Trade Policy: EU Critical Raw Materials Act, U.S. Defense Programs, and the 100% Import-Reliant West

EU Critical Raw Materials Act: terbium as a named Strategic Raw Material

Terbium appears explicitly among the rare earths the European Parliament identifies for CRMA strategic-stock assessment: “the Commission, together with the Member States, [should] assess the minimum level for the EU of strategic stocks of REEs listed as SRMs (neodymium, praseodymium, terbium, dysprosium, gadolinium, samarium and cerium)” (European Parliament resolution, 14 Jul 2025). The CRMA sets non-binding 2030 benchmarks for Strategic Raw Materials: EU extraction capacity covering 10% of annual consumption, processing capacity covering 40%, recycling capacity covering 25%, and no single third country supplying more than 65% of EU annual consumption (Econstor, CRMA legal and factual implications analysis). For terbium specifically, the EU currently sits at essentially the opposite end of that spectrum: “At present, 100% of the EU's supply of heavy rare earths such as terbium and dysprosium — which are used in electric motors, for example — are sourced from China” (Öko-Institut, 11 Jul 2025). A separate European Court of Auditors report on critical raw materials for the energy transition classifies terbium among the heavy rare-earth elements requiring dedicated EU supply-security monitoring (European Court of Auditors, Special Report SR-2026-04).

EU permanent-magnet recycled-content rules feed back into terbium demand

Beyond raw-material stockpiling, EU regulatory design directly touches terbium demand: draft implementing measures under the CRMA framework require minimum recycled-content shares of “secondary neodymium, dysprosium, praseodymium, terbium, boron, samarium, nickel and cobalt” to be present in permanent magnets incorporated into covered products sold in the EU (VDMA, Critical Raw Materials Act analysis; European Parliament, Implementing the EU's CRMA, EPRS briefing). This creates a structural, regulation-driven pull for recycled terbium supply distinct from the voluntary recycling that currently occurs through end-of-life fluorescent-lamp phosphor recovery.

U.S. import reliance and the absence of a formal stockpile

USGS records U.S. net import reliance on compounds and metals of terbium (and the other heavy rare earths) at a flat 100% for every year from 2021 through 2025, with import sources for terbium compounds and metals listed simply as “China, 100%” (USGS MCS 2026, rare earths (heavy) chapter). USGS lists the government stockpile for heavy rare earths as “None” (USGS MCS 2026, rare earths (heavy) chapter), in contrast to the broader rare-earths chapter, which records FY2025 potential National Defense Stockpile acquisitions of NdPr oxide, NdFeB magnet block, and samarium-cobalt alloy — none of which cover terbium directly (USGS MCS 2026, rare earths chapter). Instead, U.S. policy has relied on the MP Materials and Serra Verde financing packages described above, plus DPA Title III-style loans, rather than a formal Defense Logistics Agency stockpile purchase, to address terbium-specific exposure.

Extraterritorial reach: China's controls follow terbium technology anywhere

China's October 2025 Announcement 61 extends licensing requirements to overseas entities that manufacture rare-earth products “outside of China using Chinese technologies” related to extraction, separation, or magnet-making — a 50%-rule-style extraterritorial mechanism. Terbium metal, terbium oxide, and terbium-iron alloy are named among the thirteen specified items subject to this rule as of 1 December 2025 (White & Case, 13 Oct 2025; China Briefing, 10 Nov 2025). The measure exempts humanitarian-purpose exports (emergency medical use, disaster relief, public health response) subject to post-export certification within 10 business days (China Briefing, 10 Nov 2025).

Forward Look 2026–2030: A Thin Market Facing a Structural Deficit

Demand trajectory: EV traction motors and offshore wind as the structural drivers

Global terbium production is estimated at roughly 400–450 tonnes per year currently, against projected demand of approximately 700 tonnes per year by 2028 (Lanthanides.io, Terbium Price 2026). Adamas Intelligence's Rare Earth Magnet Market Outlook to 2040 frames the core supply risk directly: “With China dominating over 99% of refined dysprosium and terbium production in recent years, availability of these two critical elements outside China has potential to be a near-term bottleneck for the collective Western magnet industry scale-up, emphasizing the urgent need for new alternative sources of supply” (Adamas Intelligence, Rare Earth Magnet Market Outlook, Feb 2026). Adamas separately notes that “prices of the heavy magnet rare earths dysprosium and terbium have fared better, and despite a drop in demand this year, continue to trend upward as a result of stagnating global supply growth” (IEA Global Critical Minerals Outlook 2025 — Rare Earths demand).

China's dependency ratio is falling only slowly

Even with Lynas, MP Materials, Serra Verde, and smaller entrants scaling simultaneously, market trackers project China's share of global heavy-REE dependency falling only from roughly 99% in 2024 to approximately 91% by 2030 — a meaningful but incremental shift given the scale of demand growth (Lanthanides.io, Terbium Price 2026). Non-Chinese HREE refining technology is expected to become widely available only by around 2029, and even then at costs five to seven times higher than Chinese processing, per Benchmark Mineral Intelligence commentary cited in industry analysis (Unteachable Courses, terbium heavy rare earth supply chain, 29 Apr 2026).

Substitution and demand-side mitigation remain partial

No commercially deployed alternative eliminates the heavy-REE requirement entirely for high-temperature NdFeB magnets. Dysprosium can substitute for terbium (and vice versa) within NdFeB alloys to manage cost and supply constraints, but this only trades exposure between two scarce heavy rare earths rather than removing the dependency (Rare Earth Mining News, terbium uses). Grain boundary diffusion remains the most commercially significant mitigation, cutting total heavy-REE loading by 30–50% per magnet, and magnet-free motor designs — electrically excited synchronous motors, switched reluctance motors, induction motors — eliminate rare-earth exposure entirely but at a performance and/or size penalty that limits their use in the highest-spec EV and defense applications (Perth Critical Minerals Report, 30 Apr 2026). Toyota has separately developed a magnet formulation using up to 50% less neodymium and eliminating terbium and dysprosium altogether, substituting lower-cost lanthanum and cerium, though this approach trades some high-temperature performance headroom for reduced heavy-REE exposure (Automotive IQ, developing electric motors less dependent on rare-earth magnets).

Key risks through 2030

Three risk vectors dominate the terbium outlook. First, geopolitical: the April 2025 MOFCOM controls remain in force with no sunset date, the October 2025 expansion is only suspended (not repealed) through November 2026, and the extraterritorial Announcement 61 regime gives China leverage over terbium even once it leaves Chinese customs territory (S&P Global Market Intelligence, 22 Jun 2026). Second, feedstock: the Kachin conflict in Myanmar remains unresolved, and roughly half of the terbium entering Chinese refining depends on continued access to that single conflict-exposed region (Materials Dispatch, 11 Mar 2026). Third, capacity execution: MP Materials' Mountain Pass heavy-REE line, Lynas's new Malaysian facility, and Serra Verde's Phase II expansion all remain pre-commercial-scale or contingent on permitting, financing close, or ramp timelines that have historically slipped in the rare-earth sector.