China rare-earth exports to Japan, US plunge after restrictions

Key facts

• China's rare earth exports to Japan halved in the first half of 2026.
• China's rare earth exports to the U.S. fell by nearly 30% in the first half of 2026.
• China plans to increase rare earth output by 50% from the Bayan Obo deposit.
• The Bayan Obo deposit is the world's largest rare earth deposit.
• China's crude oil imports surged 22% in July from June.
• China's crude oil imports averaged 8.45 million barrels daily in July.
• June crude oil imports represented a decade low for China.
• China utilized substantial oil inventory stockpiles in June.

In the first half of 2026, China's rare earth exports to both Japan and the United States experienced substantial declines. Shipments to Japan were halved, while exports to the U.S. decreased by nearly 30%. These reductions suggest Beijing's strategic use of critical resources as a form of economic leverage.

Concurrently, China intends to increase its rare earth mining output by 50% from the Bayan Obo deposit. This deposit is recognized as the world's largest and plays a crucial role in global supply chains for these essential materials.

In a different sector, China's crude oil imports demonstrated a significant rebound in July. Following a historic decline in June, which marked a decade low, imports surged by 22% in July. The daily average for July reached 8.45 million barrels. This recovery was facilitated by the country's substantial oil inventory stockpiles, which had previously helped to moderate global oil prices during the June reduction in imports.