A private survey reveals that Japanese companies' rare earth procurement costs have risen by an average of over 20% compared to last year, further increasing cost pressures on businesses.
Resilire, a Tokyo-based supply chain risk management company, conducted an online survey in June of 400 decision-makers at manufacturing companies that procure rare earths and rare earth materials, and released the results this week. When asked about changes in procurement costs over the past year, approximately 30% of respondents indicated that costs had increased by 20% to 29%, the most common answer. Additionally, about 20% reported a cost increase of 10% to 19%, and over 10% cited an increase of 30% to 39%. Overall, Japanese companies' rare earth procurement costs have increased by an average of 22.3%.
The survey also shows that most companies are finding it difficult to pass on the increased costs to their customers. Among companies experiencing rising procurement costs, only 4.2% indicated they were able to pass on almost all of the cost increases to product prices; approximately 10% stated they were completely unable to pass on the costs. If we include companies that pass on less than 25% of their costs and those that pass on between 25% and 49%, more than 40% of the surveyed companies can only absorb less than half of the new costs.
