Prices have almost doubled this year.
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’s power shortage has also exacerbated supply disruptions, while surging commodity prices are increasing production costs.
Still, the price surge has deterred some demand, with magnets producers hesitating to make purchases, researcher Mysteel said in a note.
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.
“Even though rare earths are terribly important, they’re not indispensable. Given enough motivation, enough resources and enough brainpower, they can be designed out,” said Constantine Karayannopoulos, CEO of Neo Performance Materials.
“At today’s prices everybody makes money… but my word of caution is that the industry should be very careful not kill the goose that laid the golden egg,” he told Metal Events’ 17th International Rare Earths Conference this week.
(With files from Reuters and Bloomberg)
