China has recently intensified its controls on yttrium oxide due to the implementation of new export regulations. This decision comes as global production capacity of this material is decreasing due to new restrictions.
Significant Reduction in Yttrium Exports
Yttrium oxide, one of the rare and important elements in various industries, is currently facing serious supply and availability issues. According to reports, China's yttrium oxide exports this year have decreased to about two-fifths of the average for the years 2023-2024. In September 2023, only 4,000 kilograms of yttrium oxide were exported to Japan, showing a significant decrease compared to 51,000 kilograms last year.
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Price Gap and Its Effects on the Global Market
The price of yttrium oxide in Europe has reached about $1.15 million per ton, while its price in China is only $9,144 per ton. This price gap has increased to 125 times, indicating an imbalance and pressure on global buyers. Various industries, especially the chip manufacturing industry, are suffering from this shortage and rising prices.
Given that yttrium is also used in the production of turbine blades in gas power plants and jet engines, the shortage of this material extends far beyond the semiconductor industries. Additionally, the International Energy Agency (IEA) has warned that the full implementation of China's new controls could put $6.5 trillion worth of annual production outside of China at risk.
While Donald Trump and Xi Jinping are expected to meet on the sidelines of the APEC summit in Shenzhen on November 18-19, 2023, Washington's concerns about the inadequate flow of rare materials continue. U.S. Trade Representative Jamison Greer recently called for effective actions in a video call with Vice Premier He Lifeng. Some officials believe that China has made more promises regarding yttrium supply but has acted less in practice.
Ultimately, supply outside of China is progressing slowly, and Lynas Rare Earths is expected to start yttrium production at its facility in Malaysia in 2028. Additionally, USA Rare Earth has announced that it has sent samples of its yttrium oxide from a pilot plant in Colorado to an anonymous customer for testing.
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