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Ukraine has halted an intense campaign of drone strikes on oil tankers using a critical Black Sea port after a request from US vice-president JD Vance, according to a report from my FT colleagues.
Washington was alarmed that Ukraine was further destabilising oil markets and harming US companies by targeting tankers carrying crude piped from Kazakhstan to a Caspian Pipeline Consortium terminal in the Russian port of Novorossiysk.
And in other news related to the disruption of energy supplies caused by the Iran war, auction fees paid by shipping companies to transit the Panama Canal hit a fresh record last week. Demand for slots on the 50-mile-long canal has surged this year as the closure of the Strait of Hormuz has upended global shipping routes, prompting Asian customers to source more oil, gas and other petroleum products from the US.
Now, an intensifying El Niño weather event has forced the Panama Canal Authority to enact restrictions governing how low vessels can sit in the water, known as a ship’s draft. This has caused prices in the daily slot auctions to jump, as it is expected to limit the amount of cargo that ships can carry through the canal and potentially reduce the number of passage slots later this year.
Our main story today reports on concerns that Beijing is about to escalate its rare earth trade war with the US. We also have a bonus item on GE Vernova Hitachi’s plan to win the race to dominate the nascent small modular nuclear reactor market.
Erbium price surges on fears of renewed Chinese export controls
The price of a niche rare earth element used widely in infrastructure has jumped by a third over the past two months, as traders and end users look to secure stocks ahead of a possible ratcheting up of Chinese export restrictions in November.
As of August 6, the European price of erbium had risen by half since the start of June, while the Chinese price had risen by more than 40 per cent, in response to concerns that Beijing may further squeeze access to rare earths at the end of the year, when a year-long trade truce between the US and China is set to expire.
China agreed last year to halt the imposition of its harshest critical minerals export restrictions yet as part of a deal with the US — but only for a year.
Analysts and traders said the looming deadline was now driving up prices, as users looked to buy up material including erbium, on fears that the suspension might not be extended and controls might instead be imposed.
“Market participants both inside and outside of China believe that export controls may be reimposed on erbium, cutting off erbium supply to the rest of the world,” said Maeve Flaherty, rare earths pricing lead at price-reporting agency Argus Media. Buying had “sharply increased” as users looked to stockpile ahead of a possible November cliff edge, she added.
Erbium is among the broad range of metals that China dominates the production of, leverage that Beijing has weaponised by restricting access to them, with the US and Japan especially hard hit.
Erbium price surges on fears of renewed Chinese export controls
The price of a niche rare earth element used widely in infrastructure has jumped by a third over the past two months, as traders and end users look to secure stocks ahead of a possible ratcheting up of Chinese export restrictions in November.
As of August 6, the European price of erbium had risen by half since the start of June, while the Chinese price had risen by more than 40 per cent, in response to concerns that Beijing may further squeeze access to rare earths at the end of the year, when a year-long trade truce between the US and China is set to expire.
China agreed last year to halt the imposition of its harshest critical minerals export restrictions yet as part of a deal with the US — but only for a year.
Analysts and traders said the looming deadline was now driving up prices, as users looked to buy up material including erbium, on fears that the suspension might not be extended and controls might instead be imposed.
“Market participants both inside and outside of China believe that export controls may be reimposed on erbium, cutting off erbium supply to the rest of the world,” said Maeve Flaherty, rare earths pricing lead at price-reporting agency Argus Media. Buying had “sharply increased” as users looked to stockpile ahead of a possible November cliff edge, she added.
Erbium is among the broad range of metals that China dominates the production of, leverage that Beijing has weaponised by restricting access to them, with the US and Japan especially hard hit. It goes into the fibre optic cables that are widely used in the telecommunications industry and in the build-out of the data centres that will power AI. It is also used by the nuclear, medical and ceramics industries.
The rare earth was included in a sweeping array of export controls that China announced towards the end of last year, measures that it then suspended as part of the truce between the two global superpowers.
However, the more extreme November export controls will “automatically take effect again on 10 November 2026 unless the Chinese government extends the suspension, so there is a clear cliff that the market is approaching”, said Flaherty.
A range of rare earth and critical mineral export controls that Beijing imposed earlier in 2025 were not suspended and remain active, which has sent prices surging and reduced the availability of metals that are essential for sectors from technology to defence.
There are also persistent rare earths industry rumours that the Chinese engineers who are experts in using and servicing the Chinese equipment that is in some western magnet facilities are not being allowed to travel overseas to service those machines.
The squeezing of supplies has triggered a push among western nations, led by the US, to develop alternative sources of supply, including for rare earths and the powerful magnets they go into.
Credit rating agency Moody’s warned in July that Chinese rare earth export controls had “structurally changed” the risks for European companies, with the automotive sector the most exposed.
The impact on creditworthiness “is likely to be gradual and may initially be masked by inventory buffers” and “limited disclosures”, they said, adding: “Supply constraints could cause production delays or shutdowns.”
Other metals for which China temporarily suspended export controls last year include holmium, used in high-tech magnets and medical lasers, and ytterbium, added to steel and specialty alloys. Since the start of June, Chinese prices have risen by about a quarter for holmium and jumped by three-quarters for ytterbium, according to Argus. (Camilla Hodgson)
‘Gas-plus-nuclear’ power project aims to transform SMR deployment
GE Vernova Hitachi and Blue Energy have signed a deal to advance engineering design and licensing for a multibillion-dollar natural gas-plus-nuclear energy project, which they claim will transform how small modular reactors are deployed.
Both companies plan to deploy two gas turbines at an energy campus in the Port of Victoria in Texas by 2030, which will provide about 1 gigawatt of power to a nearby AI data centre under development by Crusoe. They plan to add an additional 1.5GW of power from up to five of GE Vernova Hitachi’s SMRs beginning in 2032.
The agreement represents a significant step forward for Blue Energy’s strategic pairing of natural gas and nuclear generation to help meet surging US electricity demand driven by AI and advanced manufacturing as speedily as possible.
“It’s at least two years of acceleration, which is financially very meaningful,” said Jake Jurewicz, Blue Energy’s chief executive and co-founder.
“We are shifting from the old way of building large reactor nuclear power to instead do it [in a way] that slashes costs and time to power and finally makes nuclear a financeable, repeatable product.”
The last two large-scale nuclear reactors built in the US at Plant Vogtle in Georgia went significantly over budget and cost $35bn to complete, which is equivalent to about $15,000 per kilowatt of electrical capacity.
Jurewicz told Energy Source the Blue Energy model provided “a path to 50 per cent and possibly better cost reduction”.
Blue Energy raised $380mn in funds in April and last month announced a strategic investment from Constellation, operator of the largest fleet of nuclear power plants in the US. The company is leveraging techniques from the offshore oil and gas industry by building nuclear components in shipyards in a modular fashion.
GE Vernova, which allied its nuclear business with Hitachi in 2007, has historically been one of the main builders of large-scale boiling water reactors that dominate the current US fleet. But it is now focusing on deploying a smaller boiling water reactor called BWRX-300, a type of SMR which generates about 300 megawatt electrical of power.
“The SMR route is absolutely where we’re going. That’s where we’ve kind of put a stake in the ground and put our investment dollars into,” said Eric Gray, chief executive of GE Vernova’s power segment.
The first BWRX-300 is under construction at Ontario Power Generation’s Darlington site in Canada, with completion expected by the end of the decade, which is expected to make it the first grid-scale SMR in commercial operation in the western world. (Jamie Smyth)
Power Points
Greenland oil wildcatters linked to Donald Trump-aligned TV host Dr Phil delayed a controversial drilling plan following a rebuke from the island nation’s government.
Opinion: The EU has denounced Trump’s tariffs but its carbon mechanism is a tariff by another name, writes Andrew Puzder, the US ambassador to the EU.
Opinion: Cleve Hill, the UK’s largest solar park, is unpopular with locals but the country needs more like it, writes John Gapper.
“Source: ft.com”
