Fastmarkets has relaunched rare earth prices and coverage after a pause of several years. The Crucible asked Strategic Markets Editor for Technology Metals, Caroline Messecar, to talk about why a new approach to industry coverage and pricing is necessary now.
Economic uncertainty, a slowing energy transition, unexplained price volatility, a trade and technology war between the US and China and disrupted ore supply from a politically unstable jurisdiction, Myanmar. All these factors are making it harder for automotive and other large manufacturing consumers to understand the highly developed rare earth supply chains that create some of the most advanced engineered materials on earth — from powerful magnets to cutting edge electronics and sensors and high-speed communications. Rare earths metals and chemicals go into dozens of applications from emissions reduction catalysts to cancer drugs and water treatment chemicals.
A historic lack of transparency in the industry and years of complacency on the part of some manufacturers have created a situation today, where it is harder for companies to get the information they need to make investment decisions. It is also harder for engineers to focus on using the best materials and technology for the job.
Even worse, patchy media coverage is making it easier for narrow economic interests and popular misconceptions to distort the real benefits of rare earths and the real risks.
Let’s look at some of the generalisations and clichés
Cliché #1
Rare earths aren’t really rare. Well, that is largely true. I don’t know of a single instance of engineers and companies funding and developing a large commercial application for something that is hard to get. Maybe you do? But some rare earths are rarer than others. In fact, it if wasn’t for one of the less plentiful rare earths — the $15 billion magnet industry that we know today might not even exist.
The very first permanent rare earth magnets were made out of samarium and cobalt in the 1960s. They were and are excellent magnets. But by the 1980s, US carmaker GM wanted to find a magnet that was cheaper and more suited to the mass market. Samarium is not easily available in large quantities (I didn’t use the r word) and cobalt prices were rising. The world was coming out the oil crisis and carmakers needed a way to quickly reduce the weight of cars and increase fuel efficiency. At the same time Japanese conglomerate Sumitomo was also trying to find a new magnet.
Working entirely independently of each other John Croat at GM and Masato Sagawa at Sumitomo invented neodymium-iron-boron (NdFeB) magnets and presented their discoveries at the same conference in 1983 to a stunned audience. Iron is cheap and plentiful and there is a lot more easily accessible light rare earth neodymium in the world, than heavy rare earth samarium. That is why so many new projects are focussing on supplying heavy rare earths, dysprosium and terbium, which are needed in trace amounts in high-performance NdFeB magnets for EV engines. And why the large share of heavy rare earth ore supply from Myanmar is causing concern. Like most problems there are a number of solutions, including more refining of monazite mineral as well as new deposits and producing projects. This is not always widely discussed.
Back to neodymium iron boron. Forty year later, it is still the strongest permanent magnet in the world. Or as one engineer put it “they have the highest energy product of any material.” There are alternatives, including magnets without any rare earths and some of them look promising. But no one has made a better magnet yet.
Cliché #2
Rare earths are all about defence demand. You must have seen the articles with pictures of F-35 fighter jets and stern warnings about a supply crisis. Military applications use less than 5 percent of global supply, based on estimates from industry experts.
The rare earth market in any meaningful commercial sense is about mass produced consumer goods, like electric and hybrid cars, smart phones and computers and industrial applications.
Global manufacturing chains are vast and connect many different countries and always will.
So what has changed?
Large modern manufacturers are asking for new and different kinds of supply chains – more traceability, ESG. And in a more politically unstable, post-Covid world they want more regional balance.
In the automotive industry the standard is a minimum of 4 supplier options and three sourcing countries.
What consumers need is accurate information and analysis about industry developments. And they need prices for a changing world.
For more information about Fastmarkets rare earths pricing and coverage please visit https://www.fastmarkets.com/metals-and-mining/rare-earths-prices-and-news/
