Apple Faces Higher Magnet Costs as REalloys Locks 80% of Rare Earth Supply
From 2027, US defense procurement will ban Chinese-origin rare earth inputs, heightening competition for limited magnet-grade alloys produced at REalloys’ Euclid, Ohio plant, which holds offtake rights to 80% of SRC’s oxide output. Apple’s products, dependent on rare earth magnets, may incur higher component costs and supply constraints.
1. US Defense Procurement Rules
Beginning January 1, 2027, US defense procurement rules will prohibit Chinese-origin rare earth materials across mining, refining, metallization and magnet production, forcing contractors to source from domestic or allied suppliers.
2. REalloys’ Euclid Facility & Offtake
REalloys operates a metallization plant in Euclid, Ohio to convert rare earth oxides into magnet-grade alloys, and has secured an offtake agreement for 80% of Saskatchewan Research Council’s oxide output.
3. Impact on Apple’s Supply Chain
Apple’s devices rely on neodymium-praseodymium and dysprosium magnets; limited US metallization capacity may lead to higher input costs and tighter supply as defense and tech sectors compete.
4. Future Demand Trends
Industry estimates project rare earth demand to double or triple by the 2030s due to electrification, advanced manufacturing and defense needs, intensifying pressure on global supply chains.