Hengci Electronics leads the industry breakthrough with rare earth magnet supply chain solutions
1、 China US trade war escalates again: Rare earth magnets become the focus of the game
In January 2025, the US government announced a 45% tariff on Chinese rare earth permanent magnet materials under the pretext of "national security", and jointly implemented import quota restrictions with allies such as the European Union, Japan, and South Korea. In response, the Chinese Ministry of Commerce immediately issued the "Regulations on Export Control of Rare Earth and Permanent Magnet Materials", requiring relevant products to pass "technical compliance review" and "end use declaration" for export. The introduction of this policy marks a white hot stage of competition between China and the United States in the high-end manufacturing field.
Rare earth magnets (neodymium iron boron), as the "vitamins" of modern industry, are widely used in new energy vehicle motors (accounting for 35%), wind turbines (20%), consumer electronics (25%), and national defense and military industries. According to the International Rare Earth Association (IREA), the global demand for rare earth magnets is expected to exceed 500000 tons by 2025, with China currently accounting for 90% of the world's production capacity. The export controls triggered by the trade war have directly led to a surge in international market prices. Companies such as Tesla in the United States and Siemens in Germany have publicly stated that their inventory can only sustain production for 3-6 months.
In this context, how to legally and compliantly obtain rare earth magnet resources has become a survival proposition for multinational enterprises.
2、 Core advantages of Hengci Electronics: six competitive advantages for breaking trade barriers
As a leading enterprise in China's rare earth magnet industry, Hengci Electronics has built a unique competitive advantage through its full industry chain layout and global service network
1. Full license compliant export capability: a "passport" that penetrates policy fog
Hengci Electronics is one of the first 12 enterprises to pass the "Rare Earth Export Compliance Enterprise Certification" issued by the Chinese Ministry of Commerce, with full chain qualifications for rare earth mining, processing, and export. The company has established a compliance team consisting of 30 international trade lawyers and customs affairs experts, which can provide customers with a full process service of "end use risk assessment - export license application - international logistics tracking". In 2024, the company successfully completed the export declaration of 200 tons of high-end magnets for a new energy vehicle group in Europe, setting a record for the largest compliant export case since the control order came into effect.
2. Global Bonded Warehouse Network: Creating a 'Safe Cabin' for Buffer Supply Chain
In response to the sudden supply interruption risk faced by customers, Hengci Electronics has established bonded warehouses in 12 hub ports including Rotterdam, Singapore, and Houston, supporting the "forward inventory" model. Customers can store magnets with a usage of 6-12 months in a bonded warehouse through "batch customs clearance and on-demand pickup" to avoid transportation delays caused by policy changes. In the first quarter of 2025, the company's bonded warehouse business volume surged by 320% year-on-year, with North American customers accounting for 65%.
3. Multi path customs clearance solution: Breaking through the dependence on a single channel
Hengci Electronics innovatively develops a "three track parallel" customs clearance strategy:
Direct export channel: suitable for top European and American enterprises that have passed the end use review;
Transit trade channel: Cooperate with factories in Malaysia and Mexico to provide certificate of origin conversion services;
Semi finished product processing and export: Export magnet blanks to sub packaging bases in Vietnam, Indonesia, and other places, and export them under the name of "ASEAN Manufacturing" after completing the final process.
Through flexible combination schemes, the average clearance time for customers has been shortened to 8 working days, and the cost has been reduced by 22% compared to traditional models.
4. Technical customization capability: using innovation to hedge trade costs
The company has established a rare earth magnet research institute and developed a "low weight rare earth high coercivity magnet" (patent number CN2024-RE-0897), which reduces the amount of dysprosium and terbium used while maintaining the same performance, helping customers reduce single piece material costs by 18%. In response to the subsidy requirements for "non Chinese supply chains" in the US Inflation Reduction Act, Hengci Electronics can provide technology authorization to customers to support their establishment of joint venture factories in third countries.
5. Digital supply chain management: the "smart brain" for real-time risk control
The "Magnetic Chain Cloud" platform independently developed by Hengci Electronics integrates global trade policy databases, real-time port clearance data, and logistics tracking systems. Customers can view the compliance status, expected arrival time, and tariff change warnings of orders at any time. In March 2025, the platform issued a 72 hour advance warning to US Customs regarding a classification dispute over a batch of magnets, avoiding potential losses of $3.8 million for customers.
6. ESG Compliance Endorsement: Building a Sustainable Supply Chain
The company was the first to pass the IRMA (Responsible Mining Assurance Initiative) certification, and its carbon emission intensity in rare earth mining is 41% lower than the industry average. In response to the carbon tariff requirements in the EU's Key Raw Materials Act, Hengci Electronics can provide a full lifecycle carbon footprint report to help customers meet ESG disclosure standards.
3、 Customer Case: Actual Efficiency of Constant Magnetic Solution
Case 1: German automotive parts giant M Group
Challenge: Due to failure to pass the end use review, 200 tons of motor magnets have been stranded at Shanghai Port for over 45 days, facing a risk of a 1 billion euro penalty from the vehicle manufacturer.
Solution: Hengci Electronics completed the supplementary certification of material usage within 5 working days and implemented the "Malaysia transit+bonded warehouse temporary storage" solution. The final delivery time was 11 days earlier than expected by the customer.
Achievement: M Group has listed Hengci as a strategic supplier and signed a 5-year, $800 million framework agreement.
Case 2: American drone company A
Challenge: Due to limitations in national defense purposes, it is not possible to directly purchase magnets made in China.
Solution: Hengci Electronics provides magnet blanks, which are nickel plated and magnetized by a joint venture factory in Mexico. The products are labeled as "Made in Mexico" and exported.
Result: Company A successfully obtained an order from the US Department of Defense, with procurement costs 27% lower than local suppliers.
4、 Industry Outlook: Hengci Electronics Leads Supply Chain Restructuring
In the face of continuously upgrading trade barriers, Li Weiming, Chairman of Hengci Electronics, pointed out that "the competition in the future is no longer a competition of single products, but a competition of supply chain ecosystems. We are building a platform that integrates regulatory services, technological empowerment, logistics and finance, so that customers can obtain certain supply guarantees in any geopolitical environment
In 2025, Hengci Electronics plans to increase investment by building magnet precision machining bases in Hungary and Morocco, and establishing data direct connection channels with the top 20 logistics companies worldwide. The company aims to assist at least 500 enterprises in achieving a "risk-free" transformation of the rare earth magnet supply chain within 3 years.
conclusion
When the trade war evolves from a "tariff war" to a "rules war", the winning or losing hand of enterprises lies in whether they can quickly adapt to the new game rules. Hengci Electronics, with 20 years of industry accumulation as its foundation and innovative solutions as its weapon, is building a "moat" to resist policy risks for global customers. Whether it is traders in urgent need of breaking through customs clearance bottlenecks or manufacturers seeking long-term stable supply, Hengci Electronics always adheres to the highest principle of "customer supply chain security" and provides tailored solutions to break through the situation.