According to a survey by Nikkei Asia on July 17th, it was found that the cost of rare earth procurement for Japanese companies has increased by more than one-fifth since last year, reflecting the impact of Chinese export restrictions.
Based in Tokyo, the supply chain risk management company Resilire conducted an online survey in June among decision-makers from 400 manufacturing companies that purchase rare metals and rare material components. The results were announced this week.
Nihon Keizai Asia
When asked about changes in procurement costs over the past year, the most common response was a 20%–29% increase, which accounted for approximately 30% of the surveyed companies. Around 20% of the companies reported a 10%–19% increase, while more than 10% of the companies stated that procurement costs had risen by 30%–39%. The overall average increase was 22.3%.
In companies with rising costs, only 4.2% indicated they can almost fully transfer the price increase to customers. Approximately 10% of companies reported being unable to fully transfer the cost increases. Adding in companies that responded "transfer ratio less than 25%" and "25%-49%", it means more than 40% of respondents' transferred costs for price increase were less than half.
The average proportion of rare earth procurement from China is 61%. A Resilire representative stated: “China's export restrictions in 2025, combined with the growth in demand for electric vehicles and renewable energy, further exacerbate price hikes."
In November last year, tensions between China and Japan escalated. As soon as Kaise Yuka took office, she made remarks about a potential "Taiwan crisis," and engaged in frequent military maneuvers. The Chinese side has taken various measures in response.
According to a previous report by Nikkei Asia, China announced in January this year that it would strengthen the control over the export of dual-use items to Japan, thereby increasing economic pressure on Japan. Especially in March and April of this year, China’s exports of rare earths to Japan plummeted by more than 80% year-on-year. This forced Japanese companies to urgently seek alternative suppliers from countries such as Australia and India.
However, finding alternative solutions is not easy. A senior executive of a large Japanese manufacturer expressed concerns: "If the current situation continues, domestic production in Japan will be disrupted, and factories may be forced to shut down."
