Critical shortage of raw materials: Stratec warns of production bottlenecks!

Critical shortage of raw materials: Stratec warns of production bottlenecks!

Rare earths have been on everyone's lips in recent days. Not only are they an important basis for many technologies, they also bring with them quite a few challenges. The focus is on the situation in the Baden-Württemberg company Stratec, which reports significant delivery difficulties for rare earths. Production lines for magnet types are affected due to disrupted supply chains, posing major hurdles to the industry. According to current developments, company management cannot expect the backlogs to be fully caught up by the end of the year, so the outlook for the 2025 financial year is rather muted.

Stratec is also faced with greater fluctuations in orders due to rising tariffs on the global market. The sales forecast for 2025 has already been revised downwards. Instead of the predicted increase of up to five percent, stagnation is now expected. However, despite an increase in sales in the first nine months of 2025 by 2.5 percent adjusted for currency effects to 175.6 million euros, the EBIT margin has deteriorated. This fell from 8.9 percent to 7.3 percent.

China's monopoly and geopolitical tensions

A crucial factor in this game is China, which has a monopoly in the mining and processing of rare earths. Access to these raw materials remains difficult for foreign parties because a lengthy application process is necessary. This dependence on China and the bottlenecks in the supply of raw materials were reminiscent of the negotiations between the former US government under Donald Trump and Chinese President Xi Jinping when it came to the strategic importance of rare earths.

The challenges arising from this dependence have now brought the EU onto the scene. The Commission has launched a new project called RESourceEU, which aims to ensure access to alternative sources of critical raw materials. At a recent conference in Berlin, this project was presented as a response to instability in the global raw materials market.

Strategic partnerships and investments

Analogous to the existing “REPowerEU” plan, which was developed in response to the Ukraine conflict, the EU now wants to promote partnerships with countries such as Australia, Canada and Greenland. The aim is to promote strategic projects for the production and processing of critical raw materials within Europe and thus reduce dependence on individual providers. The focus is not only on joint purchasing, but also on stockpiling in order to make the domestic industry more crisis-proof.

It remains to be seen whether these measures can have an impact in time. The situation remains tense and European companies must prepare for future challenges. Nevertheless, the EU plan shows that a rethink is taking place that could lay the foundations for a more stable and less dependent industry.