China's rare-earth curbs squeeze Japanese manufacturers

June 22 (Asia Today) -- China's exports of rare-earth magnets to Japan fell sharply in May as tighter licensing reviews disrupted supplies of materials used in electric vehicles, industrial robots and advanced manufacturing equipment.

Chinese customs data released Saturday showed that rare-earth magnet exports to Japan totaled 123 metric tons in May, down 34.6% from April, Japan's Yomiuri Shimbun reported Sunday.

Monthly shipments to Japan have remained below 200 tons since March.

China exported about 4,730 tons of rare-earth magnets worldwide in May, a decline of 7.7% from the previous month. The decline in shipments to Japan was more than four times the overall rate.

The figures have fueled concerns in Japan that stricter licensing reviews, rather than a broad decline in global demand, are constraining shipments to Japanese customers.

The dispute does not mean that Japanese companies are unable to export their own products. The immediate problem is that Japanese manufacturers are having difficulty obtaining Chinese government approval to import rare-earth magnets and related materials from China.

China tightened controls on dual-use exports to Japan in January, prohibiting shipments intended for Japanese military users, military purposes or other uses that Beijing determines could strengthen Japan's military capabilities.

The restrictions followed a broader Chinese licensing system for certain medium and heavy rare-earth products introduced in April 2025.

China says the controls are intended to protect national security and prevent the proliferation of sensitive materials. Japanese officials and companies, however, have expressed concern that the measures are being applied amid worsening diplomatic relations between Beijing and Tokyo.

Rare-earth magnets are used in electric and hybrid vehicle motors, industrial robots, factory automation equipment, wind turbines, electronic components and defense systems.

Japan has advanced technology for producing magnets and processing specialized materials but remains dependent on China for many raw materials and intermediate products.

Delays in Chinese export approvals could therefore affect Japanese automakers, machinery producers and electronics manufacturers.

Supplies of tungsten carbide have also been disrupted.

According to the Yomiuri report, China recorded no exports of tungsten carbide to Japan for four consecutive months beginning in February.

Tungsten carbide is a hard material used in cutting tools, automobile components, semiconductor equipment, precision machinery and metalworking.

Chinese officials have said legitimate civilian trade should not be affected. Companies, however, can face delays when authorities require additional documentation regarding final users and the intended use of products that could have both civilian and military applications.

Japanese electronic components manufacturer TDK said in February that China's rare-earth controls had made material procurement increasingly difficult. The company said it was diversifying suppliers and developing magnets that use fewer rare-earth materials.

The supply concerns could also affect South Korean manufacturers.

South Korean automobile, battery, electronics, semiconductor equipment and machine-tool companies are closely connected to Japanese suppliers of specialized materials, components and manufacturing equipment.

Disruptions at Japanese factories could lead to delayed deliveries, higher component prices and additional costs for South Korean companies seeking alternative suppliers.

The restrictions underscore the economic security challenges facing both South Korea and Japan as they seek to reduce their dependence on Chinese critical minerals.

-- Reported by Asia Today; translated by UPI

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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260622010007522

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This story was originally published June 22, 2026 at 5:08 PM.