Reuters, Chikako Mogi
Japan's imports of rare earth elements (REEs) from China fell 3% in May from April, the first month-over-month drop in three months, as the price of the metals surged.
China, which produces 97% of global rare earth supplies, has been tightening trade in strategic metals used in high-tech electronics, magnets and batteries, causing global concerns about supply and triggering prices to jump. But despite the surge in prices, orders for July–September from REE end users have picked up as Japanese manufacturers recover from the disrupted supply chains that resulted in suspended production in the wake of the March 11 quake.
Japanese imports of rare earths from China stood at 1,592 tons in May, finance ministry data showed on Wednesday, down from 1,646 tons in April.
"The drop in May imports may be due to high prices but with a fast recovery in production, parts suppliers are receiving orders from automakers and Japanese buyers have been flocking to China since mid-June to seal contracts for the July–September quarter," said an official from a Tokyo trading house. "If prices keep rising on strong demand for rare earths, Japanese automakers eventually must decide whether or not to shift factories to China, unless they can do away with using the material."
Japan's May REE imports were still well below December's 4,080 tons when trade resumed after Beijing halted shipments for two months from late September.
Japanese firms consume about 30 Kt. REEs a year, but the country has stepped up diversification of its supply sources. Japan aims to cut rare earth consumption by one-third within a few years and reduce its reliance on China by providing subsidies for recycling and investing in new ways to limit their use.