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Building America’s Defense Critical Metals Supply
Prices of yttrium oxide, a little-known but critical rare earth material used in everything from jet engines to semiconductors, have surged by nearly 1,500% over the past year, triggering supply panic across key global industries. According to data from Asian Metal Inc., the compound’s price has reached an unprecedented $126 per kilogram, up from less than $8 at the end of 2024.
The spike follows export restrictions China imposed in April on yttrium and several other rare earth elements. Although some of those controls were later relaxed for certain materials following U.S.-China talks, limits on yttrium remain in place. Traders report that licensing delays have slashed export volumes to a fraction of pre-April levels, creating delivery lead times of several months and fueling a worldwide scramble for supply.
The disruption has exposed the fragility of global dependence on China for strategic materials—especially those, like yttrium, essential to high-tech and defense manufacturing. With more than 90% of U.S. yttrium imports sourced from China between 2019 and 2023, according to the U.S. Geological Survey, the current squeeze is forcing manufacturers and governments to confront fundamental vulnerabilities in modern industrial supply chains.
In Europe, yttrium oxide prices have reached as high as $270 per kilogram—a staggering 4,400% increase since January—as stocks dwindle. Chinese customs figures show that direct U.S. imports have virtually halted since the restrictions took effect, while shipments to other countries have dropped by roughly 30%. Traders fear that rerouting supplies through third countries could provoke further regulatory action from Beijing.
Industry groups are sounding the alarm. Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, told Reuters that yttrium is “critical to the world’s most advanced jet engines” and that U.S. supply chains remain heavily import-dependent. Semiconductor executives also report severe strain, with one rating the supply situation a “9 out of 10” in severity. Richard Thurston, CEO of Great Lakes Semiconductor, warned that even without immediate shutdowns, longer lead times and rising costs will increasingly become a “real chokepoint” for production.
In response, companies and governments are accelerating efforts to diversify supply.
In the U.S., MP Materials—backed by the Pentagon—is stockpiling yttrium from its Mountain Pass mine while planning downstream expansion. Separately, ReElement Technologies in Indiana aims to begin commercial yttrium production in December, targeting 200 tons per year initially and scaling to 400 tons by March. If achieved, that output would cover most of estimated U.S. annual demand of 470 tons, though analysts caution that scaling refining operations will take time.
Australia’s Lynas Rare Earths is also boosting yttrium capacity from its Mount Weld mine and Malaysian processing plant. Still, for now, Beijing’s licensing system continues to dictate global access to one of the most strategically significant—and supply-constrained—materials in advanced manufacturing.
As the yttrium crisis deepens, it has become a stark case study in how quickly geopolitical friction can ripple through technology supply chains—and how urgently Western nations are working to reduce their reliance on Chinese critical minerals.
