China's dysprosium and terbium exports to Japan dry up as magnet shipments continue
Japanese buyers of the two metals are left without Chinese exports, and competitors cannot yet match China's scale in heavy rare earth processing.
Caixin Global reported on Aug. 21 that “China's exports of dysprosium and terbium to Japan fell to zero.” Not a dip, not a slowdown: zero. Rare Earth Exchanges had reported on Aug. 11 that China still exported more rare-earth magnets globally in June than in May.
Caixin Global's Aug. 21 report covers two heavy rare earths bound for one country. The Rare Earth Exchanges report covers rare-earth magnets shipped worldwide. Side by side, they raise the possibility that the drop is specific to one destination rather than a squeeze on everything China sells, though they count different goods, may not cover the same months and do not prove it. And Modern Diplomacy reported that competitors cannot yet match China's scale in heavy rare earth processing.
The Foundation for Defense of Democracies wrote on Jan. 12 that “On January 8, The Wall Street Journal reported that China halted the export of rare earths and rare earth magnets to some Japanese firms.” The same analysis added that “The measure appears to cover a broad range of Japanese firms, including those in automotive and semiconductor manufacturing, along with defense companies.” Some firms, then, but by that account they appeared to span cars, chips and defense.
A later report named materials, not firms. Rare Earth Exchanges reported on May 22 that “China has effectively halted exports to Japan of several critical heavy rare earth materials—including dysprosium, terbium, gallium, and certain yttrium compounds.”
Modern Diplomacy, also writing on May 22, listed a near-identical set: “dysprosium, terbium, yttrium oxide and gallium.” Outlets naming the same materials on the same day may be drawing on one underlying account rather than confirming each other. The trade figures carry more weight.
Those figures came in August. Rare Earth Exchanges reported on Aug. 11 that China's rare earth exports to Japan dropped 51% year on year in the first half, with the June decline far steeper than that.
81%June fall in China's rare earth exports to Japan, year on year
Taken one at a time, the reports describe three different things. The Foundation for Defense of Democracies relayed a January 8 Wall Street Journal report of a halt on exports to some Japanese firms. Rare Earth Exchanges reported on May 22 that China had “effectively halted” exports to Japan of several heavy rare earth materials, dysprosium and terbium among them. Caixin Global reported on Aug. 21 that China's dysprosium and terbium exports to Japan fell to zero. The reports do not say whether these are one restriction or several.
The strain may already reach the magnet makers. Rare Earth Exchanges reported on May 22 that “Shin-Etsu Chemical Co., Ltd. has reportedly stopped accepting new orders for certain dysprosium-containing magnets.” The hedge is in the source's own wording, and the halt covers new orders for certain magnets only.
China's magnet exports rose from May to June
A second set of numbers sits further down the Rare Earth Exchanges report of Aug. 11. China “still exported” more rare-earth magnets globally in June than in May, the report said, a rise of about 19% on its figures.
Swipe sideways to see the whole chart. The data is under it.
Show the data
| Item | Value |
|---|---|
| May | 4,730 tonnes |
| June | 5,649 tonnes |
A country hoarding supply, or one whose export licensing had seized up, would be expected to ship less to everyone. The Rare Earth Exchanges figures of Aug. 11 do not settle whether that is happening. They show magnet exports worldwide up in June against May, and rare earth shipments to Japan plunging in June against a year earlier. Magnets could be up on the month and still down on the year, so the two figures cannot rule out a general squeeze.
The month was June, and the drop in shipments to Japan that month was far steeper than the first-half pace, according to the same Rare Earth Exchanges report of Aug. 11.
The comparison has limits, and they cut against the tidiest version of the story. The Aug. 11 Rare Earth Exchanges global figure counts rare-earth magnets and compares June with May, while its Japan figure counts rare earth exports broadly against a year earlier. Caixin Global's Aug. 21 zero covers dysprosium and terbium alone. Together they show that China's global magnet exports rose from May to June; they do not show that every other buyer of dysprosium and terbium got its usual volumes. That other buyers were left untouched is one reading of the totals, not a measured fact.
The supply that could stand in for China's is small on the numbers available. Rare Earth Exchanges reported on May 22 that “Lynas produced roughly eight tonnes of dysprosium and terbium combined” in the first quarter. Without a Japanese demand figure alongside it, the gap can be described but not measured.
Modern Diplomacy offered the description on May 22: “China still dominates global heavy rare earth processing at a scale competitors cannot yet match.” The sentence speaks of China's processing scale as a whole, not of the volumes that had been bound for Japan, and its “yet” leaves the timing of any catch-up open.
Asia Times reported on June 20 on “a price floor of US$110 per kilogram on 5,000 metric tons,” and its reporting used the words “reduce dependence on any single non-G7 supplier of rare earths.” If a minimum price on a set tonnage were put in place, it would, on its face, make new mines and refineries easier to finance.
Weak orders, slow licences or a halt at the source
Japanese buyers could have cut orders for reasons of their own. Chinese licensing for heavy rare earths could simply run slower than for finished magnets, so that Japan's numbers show the strain first without any decision aimed at Japan. That account deserves a hearing, because neither the categories nor the time periods in the data line up neatly.
The reports do not settle it. Rare Earth Exchanges reported on May 22 that China had “effectively halted” exports to Japan of several heavy rare earth materials, including dysprosium and terbium. The Foundation for Defense of Democracies relayed a January 8 Wall Street Journal report that China halted exports of rare earths and rare earth magnets to some Japanese firms. Each account describes a halt by China; neither says what it was meant to achieve.
The Foundation for Defense of Democracies said in its Jan. 12 note that the measure it described “appears to cover a broad range of Japanese firms, including those in automotive and semiconductor manufacturing, along with defense companies.” Rare Earth Exchanges' May 22 report that Shin-Etsu had reportedly stopped accepting new orders for certain dysprosium-containing magnets suggests how a shortage could travel, from raw metal to magnet to the manufacturer waiting on it. Buyers with stock on hand or contracts outside China would likely feel it later than those buying month to month.
Producers outside China, Lynas among them, would gain bargaining power with Japanese buyers before they have the volume to use it fully.
China's monthly export figures by destination will settle the argument. If dysprosium and terbium shipments to buyers other than Japan hold up through the end of the year while Japan's stay at zero, the targeted reading stands. If shipments of the two metals to other buyers fall as well, the likelier story is that Chinese licensing for heavy rare earths is simply running slow for everyone. If Japan-bound shipments resume in real volume, the drop to zero was a pause.
Rare Earth Exchanges reported on Aug. 11 that China still exported rare-earth magnets globally in June, and Caixin Global reported on Aug. 21 that its dysprosium and terbium exports to Japan fell to zero. Modern Diplomacy reported that competitors cannot yet match China's scale in heavy rare earth processing. Whether the drop to zero reflects a decision aimed at Japan, the reports do not say.