Chinese exports of seven restricted rare earth elements to Japan plummeted by 51% in the first half of 2026, as Beijing tightens controls amid rising geopolitical tensions, prompting Japan to seek alternative suppliers and bolster stockpiles.
According to Nikkei, citing China’s customs data, Chinese exports of seven restricted rare earth elements to Japan fell 51% in the first half of 2026 from a year earlier, a far steeper drop than the 16% decline in China’s overall shipments and the 28% fall in exports to the United States. The sharpest shortages were in dysprosium and terbium, which are used in electric-vehicle motors, high-performance magnets and defence equipment. Both elements registered no exports to Japan so far this year, while yttrium shipments also fell to zero in June.
The monthly trend was even more severe. Nikkei said exports to Japan in June were down 81% from the same month last year, extending a four-month run of declines that began in March. China’s Ministry of Commerce introduced its rare earth export licensing system in April 2025, covering seven medium and heavy rare earth-related items, and then tightened controls further in January 2026 on dual-use exports to Japan, according to the reports.
The episode highlights how rare earths have become one of the most heavily weaponised commodities in global trade. S&P Global has reported that rare earths are essential for high-performance permanent magnets used in electric vehicles, wind turbines, industrial automation, consumer electronics and AI-related infrastructure. The International Energy Agency said China controlled 61% of mined supply and 91% of global refining and processing capacity for major rare earths in 2024, underlining how much leverage Beijing still holds over supply chains.
Japanese industry has already shown signs of adjusting to the pressure. According to the Japan Times, Japanese buyers increased purchases before the January restrictions took effect, but May saw China halt exports of several heavy rare earths and gallium to Japan amid tensions over Taiwan. The latest data suggests that Tokyo and its manufacturers may have to accelerate efforts to secure alternative suppliers, build stockpiles and reduce dependence on Chinese materials if they want to limit further disruption.
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