Imported rare earths from China dropped from 1,646 tonnes in April to 1,592 tonnes in May. China makes up 79 percent of Japan’s rare earth imports. Rare earth is imported at a smaller rate from Kazakhstan 4.5 percent, United States 4 percent and Vietnam 3 percent.
The slow down is attributed to the rising prices of the minerals, which are used for manufacturing electronics, magnets and batteries.
The July–September orders from Japanese manufacturers are up as they expect the normalization of supply chains after the massive tsunami and consequent nuclear disaster of March 11.
China reduced their export quotas for the first half of 2011 by 35 percent from the previous year with a maximum cap of 93,800 tonnes to be exported for the year. It is also creating a state owned monopoly in inner Mongolia and cracking down in illegal production of rare earths. All of these tactics have resulted in the rising prices of the minerals.
Japan has plans to reduce its annual use of 30,000 tons of rare earth from China. The plan is to diversify its sources of the metal and by creating subsidies for recycling and financing development and research for limiting their use.
China is in a position to lose some of its global demand for the metal given the rise in prices and as other countries expand their mining of rare earth to compete with the giant.