By Sherry Qin
Shares of Asian rare-earth producers were broadly higher, after Beijing banned the export of goods with potential military uses to Japan.
China said on Tuesday that it banned a list of dual-use items to Japan that could have military applications, including certain rare earth metals, machine tools, electronics including sensors and lasers and a host of other products used in manufacturing.
The move, particularly the ban on rare earth exports to Japan, demonstrates China's strategic leverage on a raw material that is essential in products such as car motors and missile-guidance systems, Citi analysts say in a research note.
The move could divert demand to non-Chinese producers while also driving up rare earth prices.
In Japan, Toyo Engineering jumped 20% and machinery maker Furukawa rose 8.2% on Wednesday. These companies are said to have expertise extracting deep sea mud containing rare earths from the ocean floor.
China supplies over 90% the heavy rare earths-- critical for high-performance magnets--that Japan needs, according to Citi.
Union Materials, a South Korean company that produces ferrite magnets, which are an alternative to rare earths, surged 30%.
China's dominant position in supplying rare-earth magnets and metals has proven a powerful trump card in trade negotiations and geopolitical disputes.
In China, Chinese North Rare Earth rose 5.4% and ZheJiang ZhongKe Magnetic was 9.3% higher.
-- Kosaku Narioka contributed to this article.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
January 07, 2026 01:23 ET (06:23 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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