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China witnessed a steep decline in rare-earth exports in July as the global epidemic resulted in weak demand.

China exported 1,620.30 tons of rare earths in July, down from 2,893 tons in June, or a 44 percent drop, according to data released by the General Administration of Customs on Friday. 

In the first seven months of the year, China's rare-earth exports were 22,735.80 tons, a 20.2 percent slide from the same period last year, official data showed. 

Market watchers said the decline was caused by the shrinking demand due to the pandemic, as most countries still cannot resume production, resulting in weak demand and delayed imports.  

Storage in other countries in the past years has also piled up, which weakened current demand, Chen Zhanheng, deputy secretary-general of the Association of China Rare Earth Industry, told the Global Times on Friday, adding that the peak season for China was in 2018.

However, experts warned that the decline may also be a result of geopolitical conflicts, as China has tightened exports of rare earths amid tensions with the US.

In July, China said it will impose sanctions on US-based arms producer Lockheed Martin, the main contractor of the recertification of the US' Patriot Advanced Capability-3 air defense missiles on the island of Taiwan, and the sanctions will likely feature the cut-off of material supply, including rare earths, which are crucial to advanced weapons production, Chinese industry experts said.

Wu Chenhui, an independent rare earths analyst, told the Global Times on Friday that the firms with export licenses may also curb sales amid geopolitical pressure. 

The drop in July may also reflect purchasers' concerns on rare earths due to geopolitical conflicts, as they might be shifting suppliers from China to neighboring countries such as Indonesia and other countries with rare earths separation capability, Chen said.

However, Chen said the US is still a big rare-earth importer of China, although exports in the first half of the year declined.  

In the first half of 2020, rare-earths exports to the US were 5,184 tons, a year-on-year drop of 35.15 percent, worth $26.59 million, a year-on-year decline of 33.85 percent, data from the association showed.

The Trump administration's ineffective control of the epidemic might have affected the macro economy of the US and led to a decline in demand, Chen said.

Wu Chenghui, a rare-earths analyst of cnfeol.com, told the Global Times that rare earths exports are expected to be even less in the next two months, as many overseas factories have not resumed normal operations.