Surging Permanent Magnet Material Rare Metal Price

International price of rare metals for permanent magnet surges due to speculation. Chinese suppliers, which represent more than 90% of the world production, limit the sales volume with expectation higher price and demand. Especially, price of dysprosium, which is used to improve the magnet performance, surges nominally while Chinese supply almost stopped, according to trading firm source.

Dysprosium metal price is around US$ 220 per kilogram, which is around 40% higher than the level at end of 2009. The price reached US$ 200 before Chinese New Year holiday and increased more after the holiday. A trading firm source said Chinese middleman traders between makers and users hold the metal with expectation for higher price.

Dysprosium market is only around 15-20 billion yen per year and relative small among rare metals. Chinese traders and even other industry players hold the speculation sensitive metal for trading profit. Higher demand expectation also contributes to the speculation. Magnet and alloy makers’ capacity utilization recovers 80% level compared with bottom of 50% after financial crisis.

The magnet demand is expected to keep increasing for hybrid and electric vehicle and energy saving appliances. The supply could get tighter when machine tool and other demand will recover from the slump. Neodymium metal price exceeded US$ 40 per kg, which is 30% higher than the price at end 2009, while a trader source said the metal supply could increase depending on the price.