TOKYO, July 28 (Reuters) - Japan’s imports of rare earths from China fell nearly 13 percent in June from May to their lowest level since February and a second month-on-month drop in a row, ministry of finance data showed on Thursday, as the price of the metal surged.
Japanese imports of rare earths from China stood at 1,386 tonnes in June, down from 1,592 tonnes in May, and the lowest since February’s 1,138 tonnes.
“The drop in imports in June suggests the prices were simply too high for Japanese buyers,” said an official from a Tokyo trading house.
“Orders from Japanese manufacturers for end-users to secure the material for July-September remain strong, but if the prices stay at elevated levels, the volume of imports may show a drop as Japanese buyers would be hesitant about accepting prices which are too high,” the official said.
“Just in the past week, prices have fallen broadly about 5 percent. But since the price is set politically by China, and not determined by supply and demand, it is difficult to forecast how much Japanese users can procure,” the official said.
China accounted for 62 percent of Japan’s rare earths imports in June, falling from 79 percent in May, with the United States making up 8 percent, up from 4 percent in May, and Vietnam also 8 percent, up from 3 percent in May. Imports from Kazakhstan stood at 4 percent, compared to May’s 4.5 percent.
Japan has stepped up diversifying supply sources while the government said Japan aims to cut rare earths consumption by a third within a few years and reduce its reliance on China, by providing subsidies for recycling and investing in new ways to limit their use.
China, which produces 97 percent of global rare earth supplies, has been tightening trade in the strategic metal which is used in high-tech electronics, magnets and batteries, causing concerns globally about supply and triggering prices to jump.
To alleviate global criticism, China eased export curbs for rare earth elements, restoring them to near-2010 levels. It set the second batch of quotas at 15,738 tonnes, bringing the full year total to 30,184 tonnes.
Japanese firms consume about 30,000 tonnes a year of rare earths. (Reporting by Chikako Mogi; Editing by Ed Lane)