Chinese export controls are noticeably reshaping global material flows. Japanese industrial companies must reposition themselves in an increasingly tight market.
The supply of critical raw materials remains strained, not only in Europe and the United States. Japan in particular is now feeling the effects of geopolitical conflicts and trade restrictions. Which materials are affected, how procurement routes are shifting, and why stable prices are currently deceiving, is explained by Brian Hendrich, Market Analyst, and Jan Giese, Head of Sales & Trading at TRADIUM.
Mr Hendrich, the discussion around critical raw materials has recently focused primarily on the U.S. and EU member states. Yet there are other nations with significant raw material needs. How would you describe Japan's current supply situation?
Brian Hendrich, Market Analyst at TRADIUM: From our perspective, Japan's supply situation has changed considerably since China tightened its export controls in 2025 and again in January 2026. Initially, Japan, unlike the U.S., continued to be supplied. However, current trade data and market observations show that these flows have now declined noticeably as well. Heavy rare earths and technology metals such as gallium are particularly affected. In practice, Japanese buyers are increasingly being forced to turn to alternative procurement markets.
What does this development mean for Japanese buyers competing internationally for available volumes?
Brian Hendrich: These alternative markets are themselves already under considerable pressure. Since strategic stockpiling began early, particularly in the U.S., available spot volumes in third countries are largely already committed. Japan is therefore now in direct competition with US customers, frequently accompanied by corresponding price pressure and limited availability. This also means that European customers, for example in the semiconductor industry, are facing competition for materials from two sides simultaneously.
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What alternative sourcing options are currently available to Japan, and where do their limitations lie?
Brian Hendrich: The picture is mixed. Southeast Asia - including Malaysia and Vietnam - as well as South Korea, in certain cases, offer access to individual materials, but typically only in limited volumes and with supply chains that are not yet fully established. Australia is playing a growing role in rare earths, but cannot realistically substitute Chinese capacities in the short term. Recycling and secondary materials are gaining relevance, particularly in Japan, but they still face structural limitations in terms of scalability and quality. Europe occasionally serves as a transshipment and refining location, but is itself also dependent on upstream supply chains.
Is it currently realistic to reduce dependence on China?
Brian Hendrich: Overall, we see no genuine one-to-one alternative to Chinese supplies at this point. What is emerging instead is a fragmented procurement market in which availability, price, and quality fluctuate significantly more than in the past. Against this backdrop, the trend towards long-term offtake agreements, strategic partnerships, and investment in non-Chinese value chains is likely to accelerate further, including among Japanese companies.
Mr Giese, how have prices for critical raw materials such as dysprosium, terbium, gallium, and germanium developed recently?
Jan Giese, Head of Sales & Trading at TRADIUM: On the pricing side, the picture appears calm at first glance: quotations are barely moving and remain at elevated levels in Europe.
Does this reflect an easing of the situation?
Jan Giese: This should not, however, be interpreted as a sign of stabilisation in the supply situation. The actual reason for the limited price movement is the near-total absence of liquidity in the market. Transactions simply barely take place, not because supply and demand are in balance, but because the market is effectively grinding to a halt. Price stability, therefore, reflects an absence of trade rather than any genuine easing of conditions.
The markets for critical raw materials are small, internationally interconnected, and often only limitedly transparent. Price movements, trade flows, and availability can therefore only be reliably assessed in the context of day-to-day trading activity and through direct exchange with producers, processors, and other market participants worldwide. TRADIUM regularly consolidates these insights on its blog and publishes quarterly market reports in partnership with the news portal Rawmaterials.net. The current report, „The U.S. and Japan Accelerate the Race for Critical Raw Materials - TRADIUM Market Report Q1/2026,“ illustrates how strongly geopolitical decisions now influence even small market segments.
About Jan Giese
Jan Giese is Head of Sales & Trading at TRADIUM GmbH in Frankfurt. A recognised expert in rare earths and minor metals such as gallium and germanium, he has been with the international raw material supplier since 2022. Prior to this, he led global procurement at Heraeus Quarzglas GmbH, where he deepened his experience in global commodity markets.
About Brian Hendrich
Brian Hendrich is Junior Trader & Market Analyst at TRADIUM GmbH in Frankfurt. A raw materials expert with a focus on rare earths and minor metals, he has been with the international raw material supplier since 2023, combining market analysis with editorial expertise. Since 2026, he has also been involved in operational trading, continuously expanding his experience in global commodity markets.
