The volume of exports to Japan has plunged as a result of China’s export controls on rare earths, with declines of around 97% concentrated in heavy rare earths. Japan is building up inventories and diversifying its sources of procurement, but the effects are not expected to emerge for some time.
Supply to Japan has fallen sharply as China has tightened its export controls on rare earths. Export controls are particularly strict for heavy rare earths, and conditions remain difficult for Japan to sustain domestic demand.
Japanese government officials explained that, based on past experience, Japan has been securing inventories and diversifying its sources of procurement. The current situation indicates that these efforts are now gathering pace.