Japan months away from running out of yttrium as China cuts exports 98%

• Japan is months from running out of yttrium, a rare earth used in jet engines and chipmaking, and has asked the US to press China to ease export controls, according to an October 20 Financial Times report
• China exported just 14.1 tonnes of yttrium oxide to Japan in January-May, down 97.7% from 605.3 tonnes a year earlier, Chinese customs data show
• yttrium oxide costs about US$1,150/kg outside China, 179 times its price two years ago, against about US$9/kg inside China, according to Argus data cited by the FT

 

Japan could run out of yttrium within “months” unless China eases its export controls, according to the Financial Times.

Tokyo has asked the US government and major companies to help persuade Beijing to loosen the restrictions, the newspaper reported, citing people familiar with the matter in Washington and Tokyo — an unnamed Japanese government official put the problem bluntly:

“Stockpiles are decreasing and rare earth saving efforts have a limit. The timeline is not years, it’s months and how to survive next year.”

The same official warned that “if everyone ignores the problem, then it will be a systemic risk to the world economy”, as China’s yttrium oxide exports to Japan fell 97.7% in January-May 2026.

How Japan was cut off

China put yttrium under licence in April 2025, as one of seven medium and heavy rare earths that exporters must now get permits to ship.

Then on January 6, 2026, Beijing banned dual-use exports to Japanese military users and to any use that helps Japan’s military, following Prime Minister Sanae Takaichi’s November 2025 comments on Taiwan.

In February, China added 20 Japanese entities to its export control list, including Mitsubishi Heavy Industries Aero Engines and several IHI aerospace units.

Japan was the largest buyer of Chinese yttrium in 2025, according to the US Geological Survey, which estimates China exported about 1,600 tonnes of yttrium compounds and metal last year, but China sent Japan no yttrium oxide at all in August and, in September, Japan received just 4 tonnes of the 110 tonnes China exported. Austria, the US, South Korea, Finland and Germany all got more.

As we reported in our earlier article China’s rare-earth restrictions push Japan to mine the Pacific seabed, the squeeze was already months old by the summer. And it’s not just yttrium:

“China shipped no gallium, dysprosium, terbium or yttrium to Japan in June, extending an eight-month halt in shipments of critical magnet materials …”

Why yttrium matters

Yttrium’s most critical use is in thermal barrier coatings that protect jet engines from extreme heat, as well as in in heat-resistant coatings for semiconductor manufacturing tools, ceramics, phosphors and lasers.

That makes Japan a pressure point for the West with US defence contractors relying on Japanese components that contain yttrium. US and Japanese government and company officials met on September 10 to discuss yttrium and magnet bottlenecks.

Japanese manufacturers are already impacted by the disruption, dor example:

• 67.6% of respondents in a June survey of 400 procurement managers and executives at manufacturers said yttrium was hard to obtain, and 17.5% reported production stoppages linked to rare earth shortages
• Tosoh told Chinese dental-materials maker Aidite it was suspending supplies of zirconia powder, according to Aidite; yttrium oxide is a key input for the powder
• yttrium oxide prices outside China had already reached nearly US$1,100/kg by May, as we reported in June

 

Alternatives are years away

Nor can Japan simply buy elsewhere. China accounted for 99% of global heavy rare earth processing in 2023, and even yttrium shipped via third countries such as Germany and Austria is nearly all derived from material processed in China, so it still depends on Beijing’s export licences.

Japan has been building alternatives since China restricted rare earth exports to Japan in 2010, but none of them produce yttrium at scale yet.

In March, Lynas agreed to make 75% of its heavy rare earth oxides available to Japanese industry until 2038. Sojitz, which set up the JARE joint venture with state agency JOGMEC, says yttrium will be added to the list of elements it imports.

The problem is timing with Lynas not expecting its first yttrium production until early 2028.

Japan’s rare earth seabed mud near Minamitorishima is further off still. A month-long trial is planned for February 2027, with an economic assessment due by March 2028, as we reported in July.

This is rationing, not an embargo

China is still licensing some yttrium. It shipped 110 tonnes in September, mostly to Europe, the US and South Korea, and Japan got a small amount — Japan’s own import data also show some Chinese-origin yttrium still arriving, but at much higher prices and lower volumes.

Notably, the disruption gives Washington its own downstream leverage after US officials reportedly told Beijing they will not export the jet engines needed for China’s Comac C919 airliner, citing production constrained by yttrium shortages.

The trend of China’s use of export restrictions, especially over metals and minerals, to gain geopolitical and trade leverage is clear. The question is whether it is a short-term — or long-term — crisis.