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Japan's Rare Earth Stockpile: China's Weakness?
8 Jan
Summary
- Japan diversified rare earth supplies after 2010 threats.
- China's export ban may impact global magnet production.
- New rare earth facilities are emerging worldwide, challenging China.
China has imposed a ban on exports of items with potential military applications to Japan, escalating a trade dispute. The most affected products are likely rare-earth magnets, crucial for various technologies from electric vehicles to missile systems. However, Japan appears relatively resilient, having spent years diversifying its rare-earth supply chains and building significant stockpiles following similar Chinese actions in 2010.
While China produces approximately 80% of the world's neodymium magnets, Japan itself manufactures about half of the remaining supply. This strategic preparation has historically shielded Japan from previous Chinese export threats. Meanwhile, other nations like European manufacturers and Indian companies have faced disruptions, struggling with delayed export license processing and drawing on existing stocks.
Despite Japan's reliance on China for roughly 70% of its rare-earth supplies, Beijing's assertive actions have inadvertently spurred a global renaissance in rare-earth production. New facilities are emerging worldwide, including in the US, Europe, and Australia, challenging China's long-held dominance in this critical sector.
