Dysprosium (symbol: Dy, atomic number 66) is a heavy rare earth element (HREE) and one of the most commercially consequential materials in the energy transition. As of March 2026, dysprosium oxide trades at $317.00/kg FOB China — among the highest prices of any magnet rare earth — reflecting both its scarcity and the absence of viable substitutes in high-performance motor applications.
What Is Dysprosium Used For?
The primary commercial use of dysprosium — accounting for the majority of global demand — is as an additive to neodymium-iron-boron (NdFeB) permanent magnets. Added at typically 1–6% by weight, dysprosium dramatically increases a magnet’s coercivity: its resistance to demagnetisation at elevated temperatures. Without this additive, NdFeB magnets lose their magnetic properties under the heat generated in electric vehicle traction motors and direct-drive wind turbine generators.
This single application makes dysprosium irreplaceable in two of the fastest-growing hardware categories of the decade. For a deeper look at how NdFeB magnets are deployed across industry, see our analysis of rare earth magnet applications in modern industry.
Secondary demand comes from defence: dysprosium is used in guidance systems, sonar transducers, and specialist military hardware. These applications are smaller in volume but strategically significant — they are the primary rationale for US Department of Defense funding of Western rare earth supply chains.
Why Dysprosium Matters for EV and Wind Supply Chains
EV motor demand is the dominant growth vector for dysprosium. A single EV traction motor typically requires between 100g and 300g of dysprosium oxide equivalent, depending on motor architecture and operating temperature. As global EV production scales toward tens of millions of units annually, dysprosium demand scales with it — and unlike some critical minerals, no commercially viable substitute has emerged that matches NdFeB performance at equivalent cost.
Direct-drive wind turbine generators represent the second major demand source. Offshore wind capacity additions — now accelerating across Europe, the US East Coast, and Asia Pacific — use larger magnet assemblies per unit than onshore equivalents, reinforcing demand growth through the mid-2030s.
Dysprosium Supply: China’s Dominance and Western Alternatives
China controls approximately 90% of global dysprosium production. The majority originates from ionic clay deposits in southern China — principally Jiangxi and Fujian provinces — where heavy rare earths including dysprosium and terbium are concentrated at grades not found in the hard-rock deposits that dominate the rest of the world. Secondary production comes from northern Chinese mixed bastnäsite and monazite deposits.
Outside China, meaningful production remains limited. Lynas Rare Earths (ASX: LYC), operating the Mt Weld mine in Western Australia, produces separated light rare earth oxides at scale but has not yet commercialised heavy rare earth separation in volume. MP Materials (NYSE: MP), operating the Mountain Pass mine in California, is similarly focused on light rare earth production; its DoD-backed processing expansion does not yet include separated dysprosium oxide at commercial scale. Both companies are working toward heavier rare earth capabilities — but neither represents a near-term substitute for Chinese supply at current volumes.
According to the USGS Mineral Resources Program, global rare earth reserves are geographically diverse — but the processing and separation infrastructure required to convert ore into separated dysprosium oxide remains heavily concentrated in China.
Dysprosium Price in 2026
Dysprosium oxide traded at $191.08/kg domestic China and $317.00/kg FOB China as of March 2026, according to Shanghai Metals Market (SMM). The spread between domestic and export pricing reflects China’s export licensing system, which adds a structural premium for buyers outside China. Western warehouse prices, where available, carry a further premium above FOB.
For current spot pricing, the full price history, and market drivers, see our dysprosium price tracker, updated on the first of each month.
Dysprosium Supply Chain: The 2026 Outlook
Western governments have identified dysprosium as a priority critical mineral. The US Department of Defense has awarded contracts to both MP Materials and Lynas specifically to develop domestic and allied-nation heavy rare earth processing capacity. The EU’s Critical Raw Materials Act (CRMA) lists dysprosium among the strategic raw materials subject to supply chain benchmarking and domestic sourcing targets.
Progress is measurable but not yet sufficient to reduce structural import dependency. Separation of heavy rare earths from ionic clay deposits requires processing chemistry and infrastructure that takes years to build. The consensus among industry analysts is that meaningful Western dysprosium separation capacity will not come online at scale before the late 2020s — leaving Chinese supply dominant through the medium term.
For investors and procurement teams, the relevant risk is not a sudden supply cut but a persistent pricing premium for non-Chinese material and the geopolitical optionality that premium represents.
What is dysprosium used for?
Dysprosium’s primary use is as an additive to neodymium-iron-boron (NdFeB) permanent magnets, where it increases coercivity and allows magnets to operate at high temperatures in EV traction motors and wind turbine generators. Secondary uses include defence guidance systems and sonar equipment.
Why is dysprosium so expensive?
Dysprosium is expensive because it is significantly rarer than light rare earth elements, is concentrated almost exclusively in ionic clay deposits in southern China, and has no commercially viable substitute in high-temperature NdFeB magnet applications. Limited Western production capacity reinforces the supply constraint.
What is dysprosium’s current price?
As of March 2026, dysprosium oxide trades at $191.08/kg domestic China and $317.00/kg FOB China per Shanghai Metals Market (SMM). Western warehouse prices carry a further premium. See the dysprosium price page for current monthly data.
Which countries produce dysprosium?
China accounts for approximately 90% of global dysprosium production, sourced primarily from ionic clay deposits in Jiangxi and Fujian provinces. Non-Chinese producers — including Lynas Rare Earths in Australia and MP Materials in the US — currently produce limited or no separated dysprosium oxide at commercial scale.
How does dysprosium relate to the EV supply chain?
Each EV traction motor typically requires 100–300g of dysprosium oxide equivalent to maintain magnet performance at operating temperatures. As EV production scales globally, dysprosium demand scales with it. Western governments have funded supply chain projects specifically to reduce dependence on Chinese dysprosium for EV and defence applications.
