Andy Home: How yttrium, a rare and obscure element, became a global hot topic.

You can get a good idea of what the current state of the planet is by looking at yttrium.

When China's President Xi Jinping and U.S. president Donald Trump meet later this month in Washington, the obscure?member? of the rare-earths family will be on the agenda.

China is the dominant supplier of yttrium in the United States, as well as other critical minerals.

China has been sporadic in its deliveries of yttrium since the middle of last year.

The resultant shortage has caused a stir in the?aerospace?, energy?and semiconductor?sector, revealing how little-known elements from the periodic table are now incorporated into modern manufacturing.

Yttrium is a critical element in China's arsenal of trade negotiations. As Japan has discovered, it can be used as a punishment.

DARK METAL

Yttrium can be described as a metallic curiosity. Although it's not a rare-earth element, it is often found with them.

It was only in the 18th Century that the first rare earths were discovered near Ytterby, a Swedish village.

Yttrium is used in everything from lasers to screen displays. Its most critical application is in thermal barrier coatings that protect jet engines against extreme heat.

There are few hard figures on the size of the market.

Even the U.S. Geological Survey - the standard for metallic information - isn't certain how much yttrium is mined. It estimates global mine production was between 10,000 and 15000 metric tons last year.

China produces a small percentage of the world's total yttrium, but the government does not disclose information on production or mining quotas.

Drip Feed

We do know that China placed export controls on yttrium and six other rare Earths in April of last year, which caused overseas shipments to grind down to a halt.

The U.S. did not receive any until October, after which the tap was re-opened ahead of a summit between Xi & Trump in Busan, South Korea.

Beijing has agreed to delay by one year the implementation of even stricter restrictions on rare earths and magnets, but it has kept in place its original controls on yttrium.

Exporters must prove that the metal is only used for civilian purposes. This turns yttrium in a precision weapon to be deployed against certain?trade partners or Western companies.

Trump called the summit "amazing", but after it, the flow of yttrium dried again. In February, an acute supply shortage caused production to stop along the U.S. Coating Supply Chain.

In March, China shipped 60 tons of yttrium to the U.S. after what appeared to be a direct intervention from the White House in support of a major U.S. firm that was struggling to obtain an export license.

The U.S. trade representative Jamieson Greer, who was appointed in February, lamented China's slow pace of yttrium imports. He admitted that "there are times when you have to make your point."

After another summit in which Beijing stated that it would work closely with the U.S. on "reasonable concerns" about rare earth shipment, the export taps were shut off until July when 29 tons of rare earths were shipped.

Beijing is clearly using yttrium to exert pressure in its larger trade dispute with the U.S. It has been supplying just enough yttrium to avoid an all-out confrontation, but not enough to ease supply-chain stress.

PUNISHMENT

Since November, when Prime Minster Sanae Takaichi angered Beijing by making comments about Taiwan's defense, Japan has received very little yttrium.

Other critical metals, such as dysprosium, gallium and terbium were also cut off. This is a repeat from 2010, when China limited rare earth exports following a diplomatic spat between Japan and China over disputed islands on the East China Sea.

Since then, Japan has diversified its supply chain and stockpiled rare Earths but remains heavily dependent on China.

In their Tokyo Stock Exchange filings, multiple Japanese companies have warned about the effects of what is essentially an unofficial embargo.

Rare earths were rarely mentioned as a concern in the media before this year.

In May and June more than two thirds of the nearly 200 filings mentioning rare earths stated that export controls affected their business negatively or would do so in future.

CARROT OR STICK?

Will Europe receive the yttrium yoke or the yttrium yoke?

How aggressively China tackles the widening trade deficit with China will determine how successful it is.

Maros Sefcovic, European Trade Commissioner, has asked China to resolve the issue before October "or else there will be enormous political pressure" to find other solutions.

Sefcovic wants to talk about, yes, the crucial controls on China's mineral exports. Yttrium is almost certain to be mentioned.

The mysterious metal is now at the center of global politics, and will remain there so long as Beijing controls supply.

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(source: Reuters)