We all know that the prices of neodymium magnets have increased and quickly, however, we felt it prudent to explain the current pricing situation so that our customers can be forewarned and forearmed for what is to come.
We track the price of raw neodymium and have done for a number of years and the current price per kg is almost double that in May 2017. Indeed, since the end of July, the price per kg has increased by over 26%. This graph is in Chinese Yuan/kg and shows just the last 2 months of prices.
We are being advised that the price is likely to continue to increase and may even reach the top of the graph before the end of the year.
There are a number of reasons for this, the first being the Chinese policy of acquiring and holding large volumes of Neodymium so that they control the market. They have also implemented an Environmental Protection policy where mining is being more strictly supervised and while this is not a bad thing, it does affect the production rate and, therefore, the prices. There are a number of companies/funds/organisations/people who hold large volumes of raw neodymium speculatively awaiting a price rise like this to make large returns on their investments. These have all created a reduction in supply which has pushed prices up. This coupled with the increasing demand for neodymium for batteries for Electric and Hybrid vehicles means that magnet manufacturers are now facing situations where prices are only valid for 24-48 hours from time of quote.
We are, reluctantly, having to start to increase some of our prices to reflect the pressure that all magnet businesses are going to come under in the next couple of months.
