INDS

china’s Export Controls Spark Yttrium Shortage Fears, Raising Specter of New Rare Earths Crisis

BEIJING/NEW YORK, December 12,‌ 2023 ⁢- Restrictions on yttrium exports from China are creating supply bottlenecks and price increases, prompting concerns of a ‌broader rare earths crisis as the ⁣world increasingly relies on these critical ⁤materials for green technologies and defense applications. ⁢The ⁤move, part of Beijing’s ‍tightened control over strategic mineral​ exports, is impacting industries ⁤from electric vehicles to electronics and​ defense, mirroring anxieties seen during a previous ⁣rare earths dispute with Japan in‌ 2010.

Yttrium,while not ⁢as widely⁤ known‍ as neodymium or dysprosium,is‍ a crucial component in various high-tech applications,including red⁢ phosphors for displays,ceramics,and as a stabilizer in alloys used‍ in high-temperature ​applications. China dominates global yttrium production,accounting ⁣for over 99% of the world’s supply,making downstream industries notably vulnerable to export controls. The current restrictions, implemented alongside‍ controls on gallium and germanium earlier this ⁤year, signal a willingness by China to leverage its dominance in⁤ the critical minerals supply⁣ chain.

Reuters’ Chief Correspondent for China Commodities and​ Energy, lewis Jackson, reports that the yttrium shortage is ​already being felt by⁢ manufacturers, with prices ⁢rising⁤ sharply in recent ‍weeks. “The situation is reminiscent of the 2010 ‌rare earths crisis,were China restricted exports of rare earth elements,leading to meaningful price⁤ increases⁤ and supply disruptions,” Jackson noted.

The restrictions ⁣come as global demand for rare earth elements surges, driven by⁣ the transition to‌ electric vehicles, wind⁤ turbines, and other clean energy⁤ technologies. According to a recent report‌ by the ⁢International Energy‌ Agency, demand for rare‌ earth elements could⁢ increase sixfold by 2040. ‍

Ernest‌ Scheyder, a senior correspondent covering critical minerals ⁣and the global energy transition, and‍ author of “The ⁢war ‌Below: Lithium, Copper,⁣ and the Global Battle to power our Lives,” explains the‌ broader implications.⁣ “China’s actions underscore the ‍urgent⁤ need ⁤for diversification of the rare earths supply⁣ chain,” Scheyder said. “Western nations are scrambling to ‍develop domestic sources ⁢and⁤ processing capabilities, but it will take years to reduce reliance on China.”

The United⁣ States,⁢ Australia, and Canada are investing in rare earths mining and processing projects, but ⁢scaling up production to meet global demand remains a significant challenge. The current yttrium situation⁢ is prompting renewed calls for strategic stockpiling⁢ and ⁤international ⁢cooperation to ensure a stable and secure supply of these⁤ vital materials. Analysts predict ⁣further export controls ‌from China are possible, potentially encompassing other⁤ critical‌ minerals, ‌intensifying the pressure on global supply⁣ chains.