The more sophisticated a product becomes, the easier it is to lose sight of something quite basic: it cannot be made without the necessary materials. Let’s think about a motor capable of withstanding extreme temperatures or the machines involved in manufacturing chips. Behind this engineering are substances that fulfill very specific functions and cannot always simply be replaced when needed. The problem seems to be a technical detail when access to one of them depends on a decision made thousands of kilometers away from the factory.
A countdown in Japan. The problem already has a name: yttrium, a rare earth metal on which part of Japanese industry depends. According to the Financial Times, inventories are dwindling and could become insufficient within months unless China facilitates exports or alternative supplies. That concern has led Tokyo to request Washington’s help in intervening with Beijing, according to people familiar with the efforts cited by the newspaper. For now, we’re talking about a warning about supply, not a complete reduction.
A metal with very specific applications. Yttrium belongs to the rare earth group, although most of its industrial importance lies in the properties of its compounds. Yttrium oxide, for example, is used to stabilize zirconia in ceramic coatings that protect certain components of aviation engines against extreme temperatures. Yttrium-stabilized zirconia is also used in certain automotive oxygen sensors, while yttrium oxide is used to coat plasma etching chambers used to make semiconductors. These are special functions that help explain why substitution is not so easy.
Control begins before the factory. To understand why Japan’s margins are so low, you have to look further back in the supply chain. According to the International Energy Agency, China occupies a dominant position in both rare earth processing and, above all, giving its trade decisions an international reach. On April 4, 2025, Beijing established export controls on certain products of seven elements in this group, including yttrium. Since then, Chinese exporters must apply for a license for the affected products: this is not a general ban, but the continuation of supply is conditional on this approval.
Tensions with Japan. Added to this dependence was a diplomatic row that worsened in November 2025, when Japanese Prime Minister Sane Takaichi said a Chinese attack on Taiwan could threaten Japan’s existence and trigger a military response. Beijing responded and, on January 6, 2026, banned the export of dual-use goods for Japanese military users or for purposes that could strengthen its military capabilities. He later expanded restrictions on certain entities and justified the measures as a means of stopping what he considered Japanese reunification. These decisions are separate from the general regulation of Ethereum established a few months ago, although they add to the tension in commercial relations.
The numbers reflect the growing pressure. The negative effects of this situation have also started to be reflected in the trade statistics. Exports of yttrium oxide to Japan have been cut from 51,000 to 4,000 kilograms between September 2025 and September 2026, according to Chinese customs data collected by AFP. Added to that is a significant price difference: $10 out of $1100 costs outside China, according to an Argus assessment cited by the Financial Times. Asian country. According to the same assessment, international prices have also increased 179 times in the last two years.
Fear of production stoppage. The concern is not limited to a rise in the price of a raw material, but what might happen if companies stop consuming enough of it. Japanese officials and industry executives consulted by the Financial Times warned that shortages could begin as early as 2026, with potential consequences for industrial activity. Companies can draw down their inventory or try to cut costs, but both solutions have limits. Therefore, Japanese authorities are not only worried about the coming months, but also how to face 2027.
Washington is also dependent on Japan. There is an explanation for Tokyo’s request that goes beyond diplomacy: American supply chains, including defense, use components made in Japan that contain yttrium. The Japanese government has expressed its concerns to US authorities and major companies in the country to facilitate exports to China, the newspaper suggested. Reuters documented a meeting held on September 10, 2026 between US and Japanese representatives to address supply issues with trade participation. Negotiations with Beijing respond, therefore, to a shared industrial risk, not an exclusively Japanese one.
Solutions require more than agreement. Talks with Beijing could ease the situation if they allow shipments to increase, but other options mentioned by British media, such as finding additional reserves or finding alternatives, are also not guaranteed. Each application requires specific characteristics, and having an alternative source does not mean that it can immediately provide the required amount. So, Japan has to deal with two different horizons: factories that will have to continue operating in the coming months and a dependency that will remain even after this shortage ends.
Picture | Japan Procurement, Technology and Logistics Agency (ATLA).
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