en.Wedoany.com Reported - On July 21, trade statistics released by the General Administration of Customs of China showed that in June, China exported 128 tons of rare earth magnets to Japan, an increase of 5 tons from May, but still at a low level. During the same period, China's global exports of rare earth magnets rose by approximately 19% month-on-month.
Before February this year, China's monthly exports of rare earth magnets to Japan remained above 200 tons, dropping to over 180 tons in March and April, and falling to over 120 tons in May. Among dual-use rare metal products, exports of tungsten carbide and tungsten powder to Japan have been zero since February, and remained so in June.
This situation is believed to be related to China's export control measures on dual-use items to Japan implemented since January. In November last year, tensions between China and Japan escalated, with Japanese Prime Minister Shigeru Ishiba taking office and making remarks about so-called "Taiwan contingency," along with frequent military moves. China has taken multiple measures in response. Nikkei Asia previously reported that China's rare earth exports to Japan plummeted by over 80% year-on-year in March and April.
An online survey conducted by Tokyo-based supply chain risk management company Resilire among 400 decision-makers from manufacturing enterprises sourcing rare earths and rare earth materials showed that procurement costs for rare earths at Japanese companies have risen by more than one-fifth since last year. Among companies reporting cost increases, only 4.2% were able to pass on nearly all of the increase, while about 10% were completely unable to do so. Including those who answered "less than 25%" and "25% to 49%," over 40% of surveyed companies passed on less than half of the cost increase. These companies source an average of 61% of their rare earths from China. A Resilire official stated that China's 2025 export restrictions, combined with growing demand from electric vehicles and renewable energy, have further intensified upward price pressure.
Analysis indicates that Japan's domestic heavy rare earth reserves will be largely depleted by the end of 2026. An executive at a major Japanese manufacturer expressed concern, saying, "If the current situation continues, domestic production in Japan will be disrupted, and factories may be forced to shut down." Takeshi Higashizawa, chief economist at Mizuho Research Institute, noted that during China's export control measures against Japan in 2010, Japan's economic losses accounted for about 0.9% of its GDP at the time. Given the far greater importance of rare earths in various supply chains today, the impact this time is expected to be more severe. Nomura Research Institute estimates that if supply disruptions last three months, Japan's economic losses would be about 660 billion yen (10,000 yen equals approximately 417 yuan), rising to 2.6 trillion yen if extended to one year.
Against this backdrop, Japan has begun attempting to extract rare earths from discarded air conditioners. According to All-Nippon News Network (ANN), this marks Japan's first extraction of rare earths from waste household air conditioners. Mitsubishi Electric has taken the lead in launching this project, with recycling tasks divided among specialized companies for each process. The main process involves removing compressors from collected outdoor units, disassembling them, extracting magnets containing neodymium and other rare earths, and refining them for reuse in product manufacturing. Estimates suggest that through this recycling system, about 35% of the rare earths needed for air conditioner production could be replaced by recycled materials. However, dismantling household appliances is difficult and costly. A single inverter air conditioner contains only about 20 to 30 grams of rare earths, and extracting 1 kilogram of rare earths requires dismantling dozens of waste air conditioners, primarily yielding light rare earth elements like neodymium with purity below 80%. Mitsubishi Electric plans to recycle about 230,000 air conditioners annually, recovering an estimated few tons of rare earths per year, while Japan consumes approximately 20,000 tons of rare earth magnets annually, making it difficult to address the main demand.
Separately, according to Reuters, a project leader supported by the Japanese government stated that Japan will begin trial extraction of rare earth-rich mud from the deep seabed near Minamitorishima Island in January next year. Some Japanese media estimates claim that, based on an annual consumption of 20,000 tons, the rare earth deposits in the waters near Minamitorishima could sustain Japan for 800 years. However, Professor Toru Okabe of the University of Tokyo said that achieving domestic rare earth production would likely take more than 10 years. Japanese media analysis suggests that the industrialization cost of mining rare earth mud from Minamitorishima could be up to 20 times that of Chinese rare earths. Japan is also scouring the world for potential mineral sources, such as Greenland, which ranks eighth globally in rare earth reserves, and plans to send a delegation this summer to assess mining feasibility. However, the Greenlandic government and residents remain cautious or opposed, citing concerns about impacts on local fisheries and the environment. Japan has also funded alternative producers such as Australia's Lynas Rare Earths, but the company produced only 8 tons of dysprosium and terbium in the first quarter of 2026, compared to China's monthly exports of about 14 tons of these two minerals to Japan in 2024.
