Analysis of recent rare earth price surge
The Secretary for Magnetic Materials Lin Amley from China Rare Earth Industry Association recently paid a visit to several magnetic companies in China and also conducted some researches regarding the recent abnormal price fluctuations of rare earth:
According to the statistics, the magnet market is not as strong as people think because of application of NdFeB market did not appear to grow quickly or have any new growing potentials. At the first half of 2017, sintered NdFeB production increased by 3% compared with the same period in 2016. Medium and low-end product output declined. The 2017 annual production is expected to be flat with 2016, so the demand for rare earth raw materials in the second half will not increase.
Earlier this year, rare earth raw material prices have been rising, especially the recent price fluctuations, causing attentions and concerns from the industry.
Sintered NdFeB producers hope that the price of rare earth raw materials maintain stable and can be expected to rise, which is conducive to a sustainable and healthy development of rare earth industry chain.
Due to the characteristics of sintered NdFeB production, it is normal for companies to reserve material for production. Most of the producers, especially large enterprises all have sufficient funds and a certain amount of raw materials, plus recycling during magnet processing, the raw material reserves are relatively adequate. if the end user does not increase the order (the actual situation is orders are reduced), producers will not increase purchases in the short term, or even because of the surge in prices, company will delay their procurement process.
Sintered NdFeB users are particularly concerned about the volatility of rare earth raw materials and worry about the same situation in 2011 will happen again, which is most companies are at the wait-and-see mode, and a small number of companies are beginning to discuss possible impacts and potential product alternatives.
Raw material producers and sales companies believe that the rise in raw material prices this year is mainly due to market supply and demand imbalance. However. the recent abnormal price fluctuations is mainly caused by market speculation, part of the traders are hoarding raw materials, making the raw materials shortage even worse, coupled with some inaccurate and irresponsible information, the rare earth price was boosted irrationaly.
From China Rare Earth Industry Association-2007-08-15