Chinese export controls have triggered a rapid expansion of rare earth magnet production capacity in the USA. Rare earth magnet recycling players stand to benefit, with IDTechEx forecasting an explosive 14-fold increase in US swarf production across the next five years. Moving forward, this will enable emerging rare earth recycling players to capitalize on a significant new secondary feedstock source.
Rare earth recyclers eye explosion in US magnet swarf production
The USA has pursued an aggressive mine-to-magnet buildout as it seeks to reduce its dependence on Chinese rare earth magnets, which account for 92% of global production in 2026. Consequently, IDTechEx believes that the explosive expansion of the US magnet industry provides a significant growth opportunity for emerging rare earth recycling players looking to capitalize on the growing availability of magnet swarf.
Magnet swarf consists of off-cuts and scrap produced by subtractive manufacturing processes, and provides a well-defined source of high-value magnet rare earths for recyclers. Conversations between IDTechEx and key industry players have revealed that swarf rates of up to 40% are commonplace, with even higher rates possible as new US magnet players optimize their manufacturing processes. Consequently, forecasting from IDTechEx's latest research report, 'Rare Earth Magnets 2027-2037: Technologies, Supply, Markets, Forecasts', shows that US swarf production will rise 14-fold by 2031 as it scales alongside magnet production.
The subtractive manufacturing of rare earth magnets produces swarf, with IDTechEx forecasting that a 14-fold increase in US swarf production will provide a significant new feedstock stream for emerging rare earth recyclers. Source: IDTechEx.
Critical mineral nationalism and high oxide prices drive rare earth recycling resurgence
While various US players are exploring new rare earth mining projects to support their expansion plans, many of these will not produce at scale until the 2030s. Furthermore, new rare earth mines are CapEx intensive, while the processing of primary rare earth mineral concentrate is further complicated by the need to separate high-value magnet rare earth oxides (such neodymium, praseodymium, dysprosium and terbium) from low-value rare earths (e.g. lanthanum and cerium) and radionucleotides.
Rare earth recycling technologies have therefore received growing strategic attention, as they provide access to an alternative secondary feedstock stream that is both enriched in magnet rare earths and domestically sourced. The growing strategic importance of rare earth recycling was highlighted in July 2026, when a new US Federal directive introduced an export ban on end-of-life magnets in order to secure domestic supplies of secondary critical materials.
Further tailwinds are provided by the high rare earth oxide commodity prices that have resulted from supply constraints imposed by Chinese export controls, with IDTechEx noting that these critical minerals now trade at up to 4x higher prices outside China. While raising costs for consumers, these high prices act as a significant market driver for emerging long-loop recycling players that recover high-purity oxides using chemical methods including solvent extraction and liquid chromatography.
Internal swarf recycling is key to high-efficiency magnet production
With high swarf rates being an unavoidable aspect of rare earth magnet production, internal closed-loop swarf recycling is key to maximizing efficiency. This is exemplified by the Chinese market leader JL Mag, who told IDTechEx that they have achieved a 30% recycled content rate (rising to 50% in 2027) for their magnets, with this achieved through swarf recycling.
Consequently, major new US magnet players including MP Materials and USA Rare Earth have each announced that their in-house rare earth separation facilities, in addition to processing primary mineral concentrate, will include dedicated solvent extraction lines for the long-loop chemical recovery of rare earth oxides from swarf.
Emerging recycling partnerships and outlook
IDTechEx analysis shows that swarf recycling currently accounts for almost 90% of all rare earth magnet recycling. In contrast, recycling rates for used magnets are much lower, with insufficient collection and pre-processing infrastructure hindering end-of-life recovery and limiting the availability of these magnets to recyclers.
The ongoing expansion of emerging rare earth recycling players across the USA and Europe will therefore initially be sustained by partnerships with magnet producers that lack internal swarf recycling capability. This is exemplified by the North American long-loop recycler Cyclic Materials, who have agreed partnerships with Europe's two largest magnet producers Vacuumschmelze and Neo Performance Materials to accept swarf and return high-purity rare earth oxides that facilitate higher recycled content rates.
In the long-term, IDTechEx believes that the expansion of rare earth recycling capacity initially enabled by swarf growth will drive the future establishment of recycling streams that enable the "urban mining" of end-of-life magnets from EVs, wind turbines and data centres. Key industry players are now collaborating to establish circular magnet supply chains which confer both enhanced supply chain security and resilience, with IDTechEx forecasting that global rare earth recycling rates will grow almost 5x by 2037.
IDTechEx 2027-2037 Rare Earth Magnet Recycling Market Forecast
IDTechEx's latest research report, 'Rare Earth Magnets 2027-2037: Technologies, Supply, Markets, Forecasts', provides a comprehensive overview of the entire rare earth magnet value chain grounded in primary research based on conversations with key industry players. This includes dedicated coverage of rare earth recycling, including detailed technical evaluations of emerging long- and short-loop technologies, analysis of capacity expansions and partnerships announced by key players, and assessment of strategic government interventions into the rare earth recycling market.
IDTechEx forecasts that the rare earth magnet market will grow to US$13.3B in annual revenue by 2037, driven by growing demand from applications in the E-mobility, wind energy and robotics sectors. This analysis is grounded in the report's granular 10-year rare earth magnet supply, demand and recycling forecasts, which are available both by weight (tonnes) and revenue (US$) and further segmented by region, application and material. Detailed analysis into the implications of the ongoing expansion of ex-China supply chains is provided throughout, with regional breakdowns available for each stage of the rare earth magnet value chain.
For more information on this report, including downloadable sample pages, please visit www.IDTechEx.com/REM, or for the full portfolio of related research, including critical materials and sustainability, visit www.IDTechEx.com.
