China stopped shipping two rare earth metals to Japan but kept exporting magnets worldwide
Japan's magnet makers rely on those metals to make magnets that withstand heat, and an Australian miner has agreed to reserve a share of what it produces for Japan.
China exported about 14 tons a month of dysprosium and terbium to Japan in 2024, according to a Reuters report carried by Kitco News on May 22. Since December, the report said, citing Chinese customs data, those exports have stopped.
Dysprosium and terbium are heavy rare earths, the additives that let a magnet keep its strength when it runs hot. “To improve heat resistance, it is necessary to add heavy rare earths,” Proterial said in a release dated July 22 last year.
China's exports of rare earth permanent magnets from January to August ran well ahead of the same period last year, Shanghai Metals Market, or SMM, reported on Sept. 20. On those numbers, the stop falls on an ingredient bound for Japan while China's total magnet exports grew over those eight months. Japan hosts the world's largest rare earth magnet industry outside China, Crux Investor wrote on July 20, and its manufacturers are among the most exposed.
Set the comparisons side by side, and Japan's numbers fall steeply while the world's do not. Japan's dysprosium imports in the first half fell by more than four-fifths from the same period two years earlier, according to a Nikkei report summarised by TrendForce on Aug. 17. China's magnet shipments to Japan roughly halved in July, News On Japan reported on Aug. 22, citing TV Tokyo BIZ. China's exports to the world as a whole slipped only slightly, the same report said. SMM's Sept. 20 count for January to August rose by nearly a quarter.
- Drop in Japan's dysprosium imports, first half of this year
- 82%vs the same period two years earlier; Nikkei via TrendForce
- Drop in China's magnet exports to Japan, July
- 52.2%from the same month a year earlier; TV Tokyo BIZ
- Drop in China's magnet exports to the whole world
- 3.6%from a year earlier; same TV Tokyo BIZ report
- Rise in China's magnet exports, January to August
- 23%vs the same period last year; SMM
The metals data ends earlier than the magnet data. Crux Investor reported on July 20 that China shipped no gallium, dysprosium, terbium or yttrium to Japan in June, which it called an extension of the export freeze. The magnet figures run through August, and that month was softer.
SMM reported on Sept. 20 that August magnet exports were 5,010 metric tons, down 6% from the month before and down 18% from a year earlier. In its Aug. 21 analysis of July, SMM had put the monthly average for January through July at 5,268 tons. In that same analysis it kept its full-year forecast at approximately 61,600 tons.
A stop on one side and a trickle on the other
Japan's own import count is not zero. TrendForce reported on Aug. 17 that Japan imported 13 tons of dysprosium in the first half, with nothing arriving in January, February, May or June. That implies some metal landed in March or April. The two counts describe a stop on one side and a trickle on the other. One records what China's customs saw leaving for Japan; the other records what Japan took in, and the figure as TrendForce published it names no origin.
The squeeze has a company name. Shin-Etsu, a major Japanese magnet maker, has stopped accepting new orders for dysprosium-containing magnets, a Western customer told Reuters on condition of anonymity in the May 22 report. That is one unnamed customer's account, not a statement from the company.
China sent Japan 111 tons of magnets in July, by the TV Tokyo BIZ count that News On Japan carried on Aug. 22. That is small beside a worldwide flow that SMM's Aug. 21 analysis measured in thousands of tons a month. The likelier reading is that Japan's exposure runs through the ingredient more than through the finished product.
The alternative supplier Japan has signed is an Australian miner. Caixin Global reported on March 12 that Lynas Rare Earths will reserve 75% of its heavy rare earth oxide production for Japan under a new supply agreement. Sojitz announced on Sept. 2 that it and JOGMEC had agreed with Lynas to supply the Japanese market with up to 65% of the dysprosium and terbium Lynas makes from its Mt. Weld raw material. Sojitz said the output would diversify supply sources that are “currently concentrated to China.”
Lynas produced 8 metric tons of dysprosium and terbium in the first quarter of this year, according to the Reuters report of May 22. That is less than China used to send Japan in a single month, on the same report's figures, and the agreements give Japan a share of Lynas's output, not all of it. The half-year of dysprosium imports that Nikkei counted, in the report TrendForce summarised on Aug. 17, is also smaller than that single month.
Swipe sideways to see the whole chart. The data is under it.
Show the data
| Item | Value |
|---|---|
| China to Japan, one month | 14 tons |
| Japan dysprosium imports, first half | 13 tons |
| Lynas output, first quarter | 8 tons |
Japan has other cushions. An official at the Japanese industry ministry told Reuters, in the May 22 report, that Tokyo is releasing stockpiled supplies where necessary and does not disclose details. The official added that the government is aware of concerns over rising prices and tightening supplies. Asia Times wrote on Jan. 10 that Japan has invested for 15 years in overseas projects, recycling and alternative technologies, yet still imports about 60% of its rare earths from China.
The other reading: a squeeze on everyone
The same evidence can be read as a squeeze on everyone, with Japan only the extreme case. Nikkei, as summarised by TrendForce on Aug. 17, noted that European dysprosium prices have risen sevenfold from levels seen before China imposed export controls in April 2025. Scarcity, on that account, is not Japan's alone.
The magnet numbers lean the same way at the margin. SMM's Aug. 21 forecast had the full year finishing about 7% above the last. A year that ran so far ahead through August cannot end there unless its closing months trail last year's pace, and August already did. If the autumn figures fall hard, the picture shifts from an ingredient that stopped reaching one buyer to a trade tightening for all.
Parts of Japan's industry have yet to see major disruption. TrendForce reported on Aug. 17 that Japan's chipmaking equipment sector has yet to face major production disruptions and that rare-earth shortages are not yet a significant bottleneck.
What the customs figures cited here cannot show is whether other buyers of dysprosium and terbium were cut off as Japan was. The Reuters report of May 22 described exports to Japan, and those are the exports that stopped.
If the stop lasts, the cost lands first on Japanese magnet makers and their customers, as the Shin-Etsu account in the May 22 Reuters report suggests. A buyer who needs a heat-resistant magnet and cannot place the order in Japan has one larger industry to approach, and Crux Investor's July 20 description locates it in China. That is an inference from the trade figures; no report cited here shows orders moving.
The arithmetic of such a stop is lopsided. On the tonnages in the May 22 Reuters report and SMM's Aug. 21 analysis, the two metals weigh little next to the magnet trade. Stopping them therefore costs China's exporters little in volume, while the magnets that need them are the heat-resistant grades.
China's monthly customs data is where the answer will appear. Further months with no dysprosium or terbium shipped to Japan, while SMM's magnet total reaches the full-year forecast it kept on Aug. 21, would confirm that the stop is selective. Shipments returning toward the monthly pace in the May 22 Reuters report would break that reading. So would a slide in worldwide magnet exports as steep as the July drop in shipments to Japan, which would point to a general squeeze.
The record so far shows two metals that stopped on the way to Japan and total magnet exports from China that grew from January to August. The replacement tonnage was small in the first quarter and the stockpile is undisclosed, so the monthly customs line carries most of the weight.