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Rare Eartth news ...FYI

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14 Jul 2011 23:21 ET

By Yuko Inoue

TOKYO, July 15 (Reuters) - Higher prices of rare earths fromChina, which controls 97 percent of global supply of thematerial used in batteries and high-powered magnets, have hitJapan hard, driving users to hunt for alternatives and reduceusage.

Trading houses estimate Japan's rare-earth products marketwill shrink 30 percent in 2011 to around 23,000 tonnes.

Here are some facts about the rare earths market in Japan,the world's biggest importer of the 17 metals.

* HOW ARE RARE EARTHS USED IN JAPAN AND HOW ARE HIGH PRICESAFFECTING THE MARKET?

-- Demand is falling sharply for such rare-earth products aspolishing powder and nickel metal hydride batteries as companiesreview their use and new technologies emerge.

-- High-power magnets and auto exhaust catalysts are now thetwo major applications for rare earths in Japan, each accountingfor a fifth of Japan's rare-earth product market. Demand for thetwo products remains steady at 4,500-5,000 tonnes a year eachdespite companies' efforts to cut consumption, due to rapidexpansion of the auto and electronics markets.

* WHO ARE THE USERS OF HIGH-POWER MAGNETS?

-- The biggest users of such magnets are makers of hard diskdrives. They are also used by makers of consumer electronicappliances such as mobile phones, audio equipment and personalcomputers. Apart from hybrid cars, carmakers use them in itemsincluding windscreen wipers and power windows.

* WHO ARE THE TOP PRODUCERS OF HIGH-POWER MAGNETS?

-- The three top sintered magnet producers are HitachiMetals <5486.T>, which has 45 percent of the market, followed byShin Etsu Chemical <4063.T> with 40 percent and TDK <6762.T>with 10 percent. Hitachi Metals' patents on light and powerfulmagnets that use dysprosium and neodymium will expire in 2014.

-- In the supply chain, rare earths imported by tradinghouses, mainly Sojitz Corp <2768.T> and Sumitomo Corp <8053.T>,are sold to four top rare earth magnet alloy makers -- Shin EtsuChemical, Sojitz affiliate Santoku, Showa Denko <4004.T> andChuden Rare Earth. The alloy is sold to the sintered magnetproducers.

* WHO PRODUCES AUTO CATALYSTS?

-- Auto catalysts, which control automotive gas emissions,are bought by carmakers from global giants such as JohnsonMatthey , BASF group , Belgian group Umicoreand Toyota <7203.T> unit Cataler Co.

-- Japan's Daiichi Kigenso Kagaku Kogyo <4082.T> is a majorsupplier of rare-earth compounds to catalytic converter makers.

* WHO ARE USERS AND SUPPLIERS OF RARE-EARTH POLISHINGPOWDER?

-- Cerium abrasives are mainly used for polishing glass forliquid crystal displays, hard disks and flat panel TVs. AsahiGlass <5201.T> is alone among the world's top LCD glassproducers in using the abrasives in its production process. Topmaker Corning uses a different production method.

-- Japan's consumption of cerium abrasive is expected toplunge 75 percent in 2011 to 3,500 tonnes as companies arere-using the polishing powder up to five times and looking touse alternatives such as zirconia compounds and ferric oxide.

-- Showa Denko is Japan's top producer of cerium abrasive,holding 40 percent of the domestic market, followed by MitsuiMining and Smeltering <5706.T> and unlisted Taiyo Koko.

* HOW ARE NEW TECHNOLOGIES AFFECTING RARE-EARTH USE?

-- Nickel metal hydride batteries for hybrid cars, digitalcameras and toys are increasingly being replaced by lithium ionbatteries, and demand for the product is expected to fall 10percent to 3,500 tonnes in 2011.

-- A rapid shift to energy-saving LED lamps is replacingfluorescent bulbs and fluorescence used in TVs.

-- Companies are also cutting down on the use ofless-important products such as ultra-violet ray reducing glassfor automotive glass and optical glass used in medicalequipment.

Sources: Companies, market research company Fuji ChimeraResearch Institute

(Editing by Clarence Fernandez)(([e-mail])(81-3-6441-1815 ReutersMessaging:[e-mail])([e-mail])(If you have a query or comment on this story, send an emailto)([e-mail]))

Keywords: JAPAN RAREEARTHS/CHINA