Japan: about two‑thirds of rare earth needs secured amid China curbs

Market Context & Direct Impact

Japan's heavy rare earth squeeze has become a multi-year sourcing problem, not a short-term spike. Caixin reports that China's shipments of dysprosium and terbium to Japan dropped to zero in the first half of 2026, and that Chinese curbs cut those imports by 75% in 2025. Nikkei had earlier reported, on 9 January 2026, that Beijing's restrictions covered non-military rare earth products bound for Japan. Argus, cited by Caixin, says domestic Japanese manufacturers can currently secure only about two-thirds of required supply, and it expects the shortage to persist until at least 2027. JOGMEC-backed alternative projects need one to two years to reach large-scale output.

Magnet shipments to Japan fell again in September while EU and US volumes rebounded. China's customs data, as reported by the South China Morning Post, show permanent magnet shipments to Japan down 19.1% month on month to 172 tonnes, while shipments to the EU rose 20.5% to 2,454 tonnes. That gap suggests the pressure is aimed at Japan rather than at global supply, which matters for buyers in Japan-linked production. Diversification is under way: Lynas agreed in March 2026 to reserve 75% of its heavy rare earth oxide output for Japan through JARE, and Sojitz is screening Laos, Cambodia and Vietnam as new sources. None of these sources publishes a landed cost or lead time for non-China supply, so the cost comparison has to come from your own supplier quotes.

Core Executive Takeaways

• Two-thirds coverageArgus puts Japanese manufacturers at about two-thirds of their required rare earth supply, so buyers should plan for a gap, not a full fill.
• Shortage into 2027Argus expects the heavy rare earth shortage to last at least until 2027, so near-term spot buying will not close the gap.
• Alternatives take timeLynas output reserved for Japan and Sojitz's Southeast Asia search widen the options, but JOGMEC-backed projects need one to two years to scale.

Strategic Playbook

1. 1
   Qualify origin now

   Ask Japan-facing suppliers for written origin declarations on dysprosium and terbium inputs, the share sourced from China, and firm allocation commitments for 2027 deliveries.

2. 2
   Rebuild landed cost

   Model non-China supply against China landed cost, including the extra inventory carrying cost of holding buffer stock through the 2027 gap, using your own quotes as the sources give no benchmark.

Filed 17:42 GMT, 5 November 2026, for the second edition of 5 Nov.
As agents only.

Sources

1. China's rare earth magnet exports to EU and US rebound in SeptemberSouth China Morning Post, published 20 October 2026
2. Japan Faces Heavy Rare-Earth Shortage as China Curbs SupplyCaixin Global, published 21 August 2026
3. Japan's Sojitz Eyes Southeast Asia for New Rare Earths SupplyBloomberg, published 12 May 2026
4. After China Curbs, Japan Secures 75% of Lynas' Heavy Rare EarthsCaixin Global, published 12 March 2026
5. China now curbs civilian-use rare-earth exports to JapanNikkei Asia, published 9 January 2026

Claims ledger: 13 facts and where each comes from

• Rare earth permanent magnet shipments from China to Japan fell 19.1% month on month to 172 tonnes in September 2026, per Chinese customs data reported by SCMP.¹
• Chinese shipments of rare earth permanent magnets to the EU rose 20.5% month on month to 2,454 tonnes in September 2026.¹
• Chinese shipments of rare earth permanent magnets to the United States rose 18% month on month to 604 tonnes in September 2026.¹
• Magnets are critical components in electric-vehicle motors, wind turbines and advanced defence applications.¹
• China's exports of dysprosium and terbium products to Japan fell to zero in the first half of 2026.²
• China, which controls about 80% of heavy rare earth supply, cut Japan's dysprosium and terbium imports by 75% in 2025 (Caixin, citing Argus).²
• Argus says domestic manufacturers in Japan can currently secure only about two-thirds of their required rare-earth supply, in a report dated 17 August 2026.²
• Argus expects a severe shortage of heavy rare earths in Japan to persist until at least 2027.²
• JOGMEC-backed alternative projects will take one to two years to reach large-scale production.²
• Sojitz is looking to Southeast Asia and other regions as potential new rare earth sources outside Australia, according to Bloomberg (May 2026).³
• Sojitz's CFO said areas connected to southern China, such as Laos, Cambodia and Vietnam, are potential regions the company will look into.³
• Lynas will reserve 75% of its heavy rare earth oxide production for Japan under a new supply agreement with JARE, amid tightened Chinese export controls (Caixin, 12 March 2026).⁴
• China's restrictions on exports of rare earth-related products to Japan include those for non-military use, Nikkei reported on 9 January 2026.⁵

Every figure above is tied to a cited source that was checked on the day of filing. Found an error? Tell the desk.