China’s exports of yttrium to Japan fell 98 per cent in the first nine months of 2026, according to customs data released on 4 November, as export controls on rare earths tightened following a diplomatic dispute.
Shipments fell to 18 tonnes from 887 tonnes a year earlier. In September alone, exports were 4,000kg against 51,000kg in the same month of 2025.
What yttrium is used for
Yttrium is a rare earth element used in semiconductor manufacturing equipment, jet engine coatings, flat-panel displays, lasers and medical imaging equipment. It is rarely the main material in a product, but it is difficult to substitute in the applications where it is used.
China accounts for around 92 per cent of the world’s refined rare earth production, according to the International Energy Agency. That concentration gives Beijing leverage over the supply chains of countries that need the materials, particularly for defence and advanced manufacturing.
The price gap illustrates the constraint. Yttrium oxide trades at around $1,150 a kilogram outside China, against about $9 a kilogram inside the country.
Why exports to Japan fell
The controls were tightened after remarks by Japan’s prime minister, Sanae Takaichi, on Taiwan in November 2025. Beijing has used export licensing as a diplomatic instrument before, and the fall in shipments to Japan is the clearest evidence yet that the measures are being applied to a specific destination.
Globally, Chinese yttrium exports fell 26 per cent to 934 tonnes. Shipments to Germany and South Korea grew, and exports to the United States nearly doubled, which suggests that the restrictions are targeted rather than a blanket ban.
Japan’s Chief Cabinet Secretary, Minoru Kihara, said in October that there was no truth to reports that Japan would run out of the material, and the government has been funding stockpiles and alternative supply arrangements.
The wider rare earth picture
Rare earths are a group of 17 elements that are essential to magnets used in electric motors, wind turbines and defence systems. China’s dominance is not only in mining but in separation and refining, the chemically difficult steps that determine who can turn ore into usable material.
Western governments have funded alternative projects in Australia, the United States and Africa, but building separation capacity takes years and requires expertise that is concentrated in China. The result is that diversification is proceeding slowly, and prices outside China remain far above domestic Chinese levels.
What it means for industry
For Japanese manufacturers, the priority is securing supply for the applications that cannot be substituted, which means paying the higher price or drawing down stockpiles. For equipment makers in Europe and the United States, the lesson is that a single export licence decision can interrupt production of products that have nothing to do with the dispute.
The longer-term question is whether the price gap narrows as alternative capacity comes online. On current timelines, that is unlikely before the end of the decade, which means the leverage China holds will remain a feature of the market.
