LONDON, January 18, 2018 /PRNewswire/ --
Neodymium (Nd) claimed the headline spot for the suite of 15 rare earths in 2017, following a positive demand outlook for NdFeB permanent magnets used in wind turbines and electric vehicle motors. Globally, rare earth operations and projects are switching their focus onto the costs of producing Nd and praseodymium (Pr) - used together as NdPr alloy in magnets - which typically carry over 80% of the total contained rare earths basket value.
The price of neodymium surged in Q3 2017, reaching US$76/kg in September, an increase of over 100% since the beginning of the year. The increase in prices was triggered by environmental reforms in China causing tightening supply from producers, which was amplified as purchases by traders removed more material from the spot market.
This price hike was short-lived, and prices fell back to Q2 levels in early December as traders released material back into the market and Chinese producers came back online. However, a second uptick in prices followed in mid-December 2017, which saw the price of neodymium increase by 19% to reach above US$47.5/kg. The December price rise has continued into 2018, with neodymium prices up a further 14% in the first ten days of January.
The volatility in rare earth prices has been felt across the full suite of elements, with the average increase of the 15 elements up 57% during Q3 2017. By the end of 2017, the average REE year-to-date prices had settled at a more modest 17% increase, with cerium realising a 44% rise. Dysprosium was the only element to end the year lower than it had started, down a modest 0.9%. Since December 2017, dysprosium prices have recovered slightly in line with other magnetic rare earth elements, while non-magnet materials have not seen the same shift. This suggests a price rise in response to increasing demand for magnetic materials compared with tight supply, which is felt across the entire REE suite.
Batteries driving raw material markets
Roskill's analysis indicates that demand for neodymium in permanent magnets is set to take off. Roskill's rare earths report, published in November 2017, forecasts Nd demand to grow by nearly 10%py over the period to 2021, off the back of demand from electric vehicles and renewable energy end-use applications. Roskill estimates neodymium was already in supply deficit during 2017, requiring stockpiled material to meet demand.
Permanent magnets are fundamental to the powertrain of electric vehicle (EV) motors already in use in major EV models such as the Nissan LEAF, Chevrolet Bolt, BMW i3 and, most recently, the Tesla Model 3 Long Range EV.
This puts Nd and Pr in league with battery materials such as graphite, cobalt and lithium, where price movements have been sparked by electric vehicle demand forecasts rapidly outpacing available supply. Whereas battery materials and technology determine the storage, recharge and power output, permanent magnet motors determine the efficiency at which this energy is utilised to move from A to B. As a result, a more efficient motor can reduce battery requirements or get more out of existing battery technologies.
Consuming 1-2kg of permanent magnets per vehicle motor, Roskill expects the demand for Nd and Pr to continue on an upward trend following the advances of the EV market. Tesla's decision to move from its patented AC induction motors used in all previous models to a 3-phase NdPr permanent magnet motor has promised a larger market share for NdPr compared to other permanent magnet materials.
Roskill's Rare Earths: Global Industry, Market and Outlook Report 16th edition is available now and provides a comprehensive overview of production, consumption, trade, prices, major producers and development projects. Quarterly updates also allow subscribers access to the latest industry trends and analysis to give an up-to-date overview of the Rare Earths industry.
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SOURCE Roskill Information Services