Japan Steel Makers Concerned on Impact by Chinese Rare Earth Export Prohibition

As for prohibition of rare earth export from China, Ministry of Economy, Trade and Industry (METI) is hurrying in fact confirmation. There seems no direct impact on Japanese steel makers by the export prohibition while Japanese automakers and electric appliance makers may be affected if the prohibition be protracted. METI and steel makers are concerned on indirect impact of the material shortage.

Mr. Akihiro Ohata, minister of METI, explained at a regular press conference on Friday that Ministry of Commerce, China, is disavowing the export prohibition but Chinese rare earth exporters are said to be ordered new shipment to Japanese importers or new contracts with Japanese consumers from Ministry of Commerce according to Japanese dealers. Mr. Ohata indicated Japanese government would ask WTO rules if Chinese government affirms the fact.

China accounts for 90% or more in world rare earth production. Japanese rare earth users depend on the import from China. In a short term, Japanese users can cover the material supply by domestic inventories and the import from other countries. But the prohibition may impact Japanese manufacturing industry if Chinese export stops for a long time. Mr. Ohata referred to the necessity of decentralization of rare earth supply sources and stockpile of rare materials.