Japan's Heavy Rare Earth Imports Plunge as China Controls Expose the Limits of Diversification

Highlights

• Japan imported just 13 tonnes of dysprosium ferroalloy in H1 2026, an 82% drop from the same 2024 period
• Yttrium oxide imports fell 74% year over year, revealing Japan's continued vulnerability in heavy rare earths
• Japan cut overall Chinese rare-earth dependence from ~90% to ~60%, largely through strategic financing of Lynas
• Lynas produced only 8 tonnes of separated Dy/Tb in Q1 2026, showing progress but still limited scale
• China's dominance in heavy rare-earth separation, not just mining, remains the core strategic bottleneck