South Korea is far more dependent than Japan on neodymium permanent magnets from China at 88%, while the rate for Japan, a land devoid of rare earth metals, is only 31%.
The Institute for International Trade of the Korea International Trade Association on Friday released the report “Supply Chains for Rare Earth Permanent Magnets and Their Implications" saying 87.9% of the nation's supply of the magnets were from China.
Such dependence from 2016 to last year rose from 82% to 88%, but Japan lowered its reliance from 42.3% to 31.1% over the same period. Chinese imports of the rare earth metal were also high in the US with 76.8% and the European Union 90%.
As the rare earth element with the strongest magnetism, neodymium is mainly used in traction motors for electric vehicles and wind turbines. China produces 92% of global supply of the metal.
Japanese corporations own a world-leading 60.5% of all neodymium manufacturing patents, making this a leading reason for their country's lowered dependence on China. Such companies built neodymium plants in the Philippines and Vietnam using their technical know-how, importing ore from the US and Australia, producing neodymium in these regions and exporting it to Japan.
"Stable supply and demand of the permanent magnet are directly related not only to industrial competitiveness such as in electric vehicles but also national security like the defense industry," the report said. "We must raise support for R&D and facility investment in this field."
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