Rare earth prices are spiking in China, with the grades used to make permanent magnets surging to their highest level in over a decade amid supply tightness.
Prices of praseodymium-neodymium oxide, or NdPr 鈥� two of the 17 rare earth elements that are used in NdFeB magnets 鈥� spiked to 735,000 yuan ($115,000) a metric tonne as of Thursday, the highest since November 2011, according to data from Shanghai Steelhome E-Commerce.
Prices have almost doubled this year.聽
A domestic shortage of rare earths is looming as China, which accounts for 70% of global production, uses quotas to preserve the strategic material used in everything from phones to computers to new-energy vehicles.
The nation鈥檚 power shortage has also exacerbated supply disruptions, while surging commodity prices are increasing production costs.聽
Still, the price surge has deterred some demand, with magnets producers hesitating to make purchases, researcher Mysteel said in a note.聽
Demand for rare earth permanent magnets, key for electric vehicles (EVs) and wind turbines, is due to soar as governments and companies step up efforts to cut carbon emissions.
鈥淓ven though rare earths are terribly important, they鈥檙e not indispensable. Given enough motivation, enough resources and enough brainpower, they can be designed out,鈥� said Constantine Karayannopoulos, CEO of Neo Performance Materials.
鈥淎t today鈥檚 prices everybody makes money鈥� but my word of caution is that the industry should be very careful not kill the goose that laid the golden egg,鈥� Karayannopoulos told Metal Events鈥� 17th International Rare Earths Conference this week.
(With files from Reuters and Bloomberg)