Investing.com -- Capital Economics analysts questioned in a note to clients on Thursday whether China will loosen its grip on critical mineral exports after June trade data showed a pickup in exports of rare earth elements.

Despite the rise, the firm added that shipments remain well below pre-Liberation Day levels.

The analysts note that following pushback from the U.S. and other trading partners, China agreed to ramp up the pace of export license approvals in June.

The June trade data is said to suggest that Beijing followed through on the commitment, with exports of rare earth elements more than doubling between May and June. However, “China’s rare earth exports remain weak,” said Capital Economics, stating they are almost 40% lower than June last year.

In addition, exports of other critical minerals have continued to fall, according to the firm.

“While declines in rare earth exports following April’s export controls were particularly sharp, China’s exports of critical minerals have been falling sharply since the start of this year,” added the firm.

While Trump announced last month that China had agreed to supply “full magnets, and any necessary rare earths… up front,” Capital Economics said the signals from China have been less positive.

“China is showing little sign of being willing to loosen its control of the world’s supply of critical metals,” commented the firm.

They explain that China’s export controls don’t just serve as a tool in trade negotiations, but also have “broader strategic aims,” giving Chinese manufacturers a competitive edge in strategic industries.

“The upshot is that, while China’s relationship with the U.S. seems to be warming, Beijing will continue to keep a tight grip on critical mineral exports,” concluded Capital Economics.

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