15/10/2025

BIZ & FINANCE WEDNESDAY | OCT 15, 2025

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China gets stricter on rare earth magnet export permits

Indonesia considers regulating CPO exports to meet B50 demand JAKARTA: Indonesia’s government may regulate exports of crude palm oil (CPO) to ensure there is enough domestic supply to produce biodiesel, its energy minister said yesterday. The world’s biggest producer of palm oil has implemented a biofuel programme blending palm oil-based fuel with diesel for more than a decade to reduce reliance on fuel imports. The current mandate is to mix 40% palm oil with diesel, known as B40. Jakarta’s plan to raise this to B50 in the second half of 2026 has raised concerns that it could reduce global edible oil supplies as Indonesia would have less to ship overseas. Acknowledging B50 would increase domestic demand for crude palm oil, Energy Minister Bahlil Lahadalia said the government is considering measures to increase palm oil production to meet rising demand, or to reduce exports. “Cutting exports is an option, one of our options,” Bahlil told reporters. “I repeat, it is an option to regulate between domestic and foreign demand and one of our instruments is DMO,” he said. Indonesia has a rule called the Domestic Market Obligation linking a palm oil company’s export permit with mandatory sales of cooking oil to the local market. Another option under consideration to raise output is opening up new palm oil plantations, Bahlil said, adding no decision has been finalised. The government completed laboratory tests on the B50 mix in August and is set to carry out road tests next. Adopting B50 would require 20.1 million kilolitres of palm oil-based biofuel a year for mixing with regular petroleum diesel, compared to 15.6 million kilolitres with B40, energy ministry data showed. – Reuters LONDON: Britain’s unemployment rate has edged up to the highest level in over four years, official data showed yesterday, adding to the country’s economic strains ahead of the government’s annual budget. The rate reached 4.8% in the three months to the end of August – the highest level since the first half of 2021, the Office for National Statistics said in a statement. That compared with un employment at 4.7% in the three months to the end of July. The data comes as Britain endures stagnant growth and stubbornly-high inflation, around six weeks before the Labour government sets out its latest tax and spending plans. “The latest statistics ... show some signi ficant cracks are forming in the UK labour market,” noted Richard Carter, analyst at investment manager Quilter Cheviot. – AFP SEOUL: ‘HUGE PROGRESS’ IN INVESTMENT TALKS WITH WASHINGTON SEOUL: South Korean Finance Minister Koo Yun-cheol said yesterday it was “huge progress” that the US was not insisting that South Korea make all of the US$350 billion (RM1.47 trillion) investments, promised in a trade deal reached in July, in the form of direct investment. There have been differences between how Seoul and Washington view the invest ment package, with the former saying it will mostly comprise loans and gua rantees and the latter saying it will be paid “upfront”. “That all of US$350 billion will not be in cash itself is huge progress,“ Koo said at a parliamentary hearing. He added the two sides were negotiating at the working level over how the package would be set up. – Reuters UK UNEMPLOYMENT IN JUNE-AUGUST HITS HIGHEST IN OVER 4 YEARS

China is the world’s top supplier of rare earths, a group of 17 elements vital in products ranging from electric vehicles and wind turbines to military radars, and tightly controls the export of many types through its licensing system. Beijing expanded those controls last week, sparking anger in the US where President Donald Trump promised more tariffs and retaliatory export bans, although he later struck a more conciliatory tone. There’s been a rush of inquiries since the announcement from foreign clients trying to get orders shipped before the new rules take effect on Nov 8, according to both sources. Adam Dunnett, secretary-general of the European Union Chamber of Commerce in China, said the number one concern for members was still the bottleneck of rare earth product applications waiting for approval. The chamber had seen both approvals and delays for its members over the past several weeks, he added. “We can’t say that we’ve seen a decrease in the level of anxiety or concern,” he said. “Some companies have had their wait extended further without any response as to why that is the case.” – Reuters

45 business day deadline, said the other, but the scrutiny is now similar to April, at the height of the trade war, when lengthy waits for licences caused magnet shortages that led to shutdowns at automotive factories. The sources declined to comment on exactly how much longer it is taking to obtain licences or elaborate on the questions that are being asked. Both spoke on condition of anonymity given the sensitivity of the issue in China. China’s commerce ministry did not respond to a Reuters fax request for comment on licence approvals. Data released on Monday showed China’s rare earth exports dropped by 31% in September. It’s unclear how much of that decline was driven by magnets because the data does not distinguish between products. “It’s not surprising to see lower exports in September as getting a new licence became increasingly difficult last month,” said one of the sources. Exports of rare earth magnets fell sharply in April and May but grew in June, July and August. Data for September will be released later this month.

BEIJING: Chinese rare earth magnet companies have been facing tighter scrutiny on export licence applications since September, sources say, even before Beijing’s move last week to expand controls over the critical minerals used in magnets. The lengthier reviews magnet makers face raise questions about whether China, the top global supplier, is seeking to throttle back magnet shipments, contrary to its commit ment to speed up exports in a trade truce with the US in May, to further tighten its grip on the products essential in military and commercial technology. Starting in September obtaining an export licence became harder, according to two sources with knowledge of the matter. Applications are now being returned more often with requests for extra information, said one of the sources. Approvals are taking longer, although generally still within the commerce ministry’s o Manufacturers face longer reviews, sources say

Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province. China’s rare earth exports dropped by 31% in September.– REUTERSPIC

BR I E F S

Trump tariffs on imported timber, furniture take effect WASHINGTON: US President Donald Trump’s fresh tariffs on imported wood, furniture and kitchen cabinets took effect yesterday, a development likely to fuel building costs and pile pressure on homebuyers in an already challenging market. All three trading partners have reached deals with the Trump administration to avert harsher duties. and economic security of all Americans.” He urged for deals that instead “roll back tariffs on building materials.” Canada, the top supplier of lumber to the United States, is set to be impacted.

But the new tariffs will “create additional headwinds for an already challenged housing market by further raising construction and renovation costs”, warned National Association of Home Builders (NAHB) chairman Buddy Hughes. US home sales have been gloomy in recent years with high mortgage rates and limited inventory pushing costs up for buyers. In imposing the latest duties, Trump said the Commerce Secretary found that “wood products are used in critical functions of the Department of War, including building infrastructure for operational testing”. Trump’s proclamation added that US wood production “remains underdeveloped”, leaving the country import-dependent. But NAHB’s Hughes said: “Imposing these tariffs under a ‘national security’ pretext ignores the importance housing plays to the physical

The 10% lumber tariff stacks on anti dumping and countervailing duties the country faces, and the United States recently more than doubled these to 35%. This means that Trump’s latest action brings duties on Canadian lumber to 45%. Stephen Brown of Capital Economics told AFP that with 30% of lumber sourced from abroad, a 10% tariff could raise the cost of building an average home by US$2,200 (RM9,300). Brown added that China, Vietnam and Mexico account for the bulk of US furniture imports. “The US gets 27% of its furniture imports from China and then almost 20% from both Vietnam and Mexico,“ he told AFP.

The duties were imposed to boost US industries and protect national security, according to the White House, and they broaden a slate of sector-specific tariffs Trump has imposed since returning to the presidency. The latest salvo features a 10% tariff on imports of softwood lumber, while duties on certain upholstered furniture and kitchen cabinets start at 25%. Come Jan 1, the rate on imported upholstered furniture is set to rise to 30%, while those on kitchen cabinets and vanities will jump to 50%. But duties on wood products from Britain will not exceed 10%, and those from the European Union and Japan face a 15%ceiling.