Japanese rare earth buyers are switching to quarterly sales contracts and looking for alternative sources after China curbed shipments, increasing prices for the materials used in hybrid cars and missiles.
Prices have increased by as much as three times since May, hurting companies such as Hitachi Metals Ltd., which makes magnetic and electronic materials, said Shinya Yamada, a Tokyo-based analyst at Credit Suisse AG. Higher costs may drive users to avoid applications based on the 17 chemically similar elements entirely, Yamada said.
China produces more than 90 percent of the world's rare earths, used in Apple Inc. iPads, Boeing Co. helicopter blades and Toyota Motor Corp. hybrid cars and wind turbines.
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