Japan Rare Earth Demand to Drop by 26% in 2011, METI

Japanese rare earth demand will decrease by 26% to 23,000 tonnes in 2011 from 2010, according to Ministry of Economy, Trade and Industry. Japanese related industry was in trouble in 2010 when China, which represents more than 95% of the world production, stopped the export to Japan after the country cut export quota. Japanese government prepared 100 billion yen of special budget for rare earth supply. The domestic consumption decreases when Japanese industry and government try to reduce the consumption by developing alternative materials and by using recycling materials.

METI expects the cerium and other rare earth consumption will halve to 5,000 tonnes for polishing material for liquid crystal and hard disc in 2011 from 2010. The users of glass makers try to reduce the consumption by shifting other materials and by recycling the materials.

The lanthanum and other rare earth demand will decrease by 46% to 1,500 tonnes for optical lens in 2011 from 2010. The rare earth demand will decrease by 14% to 5,000 tonnes for magnet of motor including automobile application when the users shift the part of the material to ferrite magnet.

The rare earth demand increases for some applications including automotive catalyst and nickel hydride battery in 2011 from 2010. However, the users try to use more recycled materials and diversify the sources to reduce dependence on China.

China halved the export quota to 30,259 tonnes in 2010 from 61,560 tonnes in 2009. The country secures 30,184 tonnes of quota in 2011 but the government includes ferroalloy with 10% or more rare earth in the quota from July, which is expected to reduce the total rare earth export by around 20% from 2010.

Japanese government tries to improve the supply stability by securing 16.5 billion yen of special budget for fiscal 2011 to reduce the consumption and develop alternative materials.