Magnetics Business & Technology - Winter 2011 - (Page 34)

GUEST COLUMN suBmitteD By mike miller, ViCe PresiDent of sales • magnet aPPliCations Volatility in the Rare-Earth Material Markets – Some Benefits After All. Since the final quarter of 2010, there have been some extraordinary movements in the prices of rare-earth metals and the precursors for their manufacture. This has been caused by a number of factors, including the effect of export quotas, the need to clean up certain parts of the production chain, speculators and the desire to put pressure on companies to develop non-Chinese sources. Added to this, the actions of lobbying groups who really would like to make everyone think that the Chinese would actually cut off supply, causing governments to consider financial handouts, and it is no surprise that there has been upward pressure on prices. I don’t intend to elaborate on each of the causes of the upward movement, since this needs to be a short article, but rather to look at some of the unintended beneficial consequences of such large increases. For several years now the permanent magnet (PM) industry focus has really been on the use of sintered NdFeB magnets, because of their high performance and progressively decreasing cost. The chart shows the price for Neodymium metal from the start of 2007. The increases that occurred during 2010 initially appeared to be a return to the pre-recessionary levels of mid 2007; however, by January 2011 it was clear that prices were not flattening off, and by July 2011 the metal cost had peaked at about 1,800 RMB / kg, compared to the mid-2007 peak in the graph, which was about 350 RMB/kg and 18x the cost during the 2009. Since Nd metal is the main material cost for the lower temperature grades of sintered NdFeB, the potential for application growth has been huge, with two products in particular appearing as (Source: AsianMetal.com) major potential users of these materials, motors for hybrid vehicles and generators in large wind turbines. In fact, these two applications alone could require a 50 percent increase in world production capacity if some of the (conservative) projections became a reality, and scares about lack of availability for other industries have resulted. Well, thankfully, because of increase in cost, this now looks unlikely because both these major applications can quite successfully be addressed by other motor / generator types that do not need permanent magnets. Since only a small fraction of wind generators use permanent magnet solutions, manufacturer have been forced to review their future designs due to the huge increase in the cost of using several tons of sintered NdFeB in each generator. Likewise, Toyota has released details of their induction (i.e. non PM) motor option for the Prius, which will offer a solution, free from the volatility and availability scares that have been circulating. So, although prices have risen dramatically, there has been no shortage of product, a situation which is far scarier to manufacturers than even massive price increases. The removal of the threat that wind generation and hybrid vehicles could suck up available supply is also welcomed by the rest of the PM users, and this should also help to regulate prices. Another consequence of the increase in Rare-Earth metal prices has been a renewed focus on the effective use of materials. Some of the processes to manufacture sintered NdFeB magnets are horribly inefficient in their utilization of starting alloys. In some cases the conversion of metal ingot to final product may only be 30 percent, with the remaining 70 percent as largely unusable scrap. This means that the customer pays for 1kg of alloy, even though the product is only 300g. This poor utilization is not found in every product, but it is not unusual to find only a 50 percent conversion efficiency, and then only some of that 50 percent scrap may be recyclable into lower grade products. However, this waste will certainly focus the www.MagneticsMagazine.com With deep roots in magnetics going back over 50 years, Integrated Magnetics can provide you with on-target solutions from permanent magnets to complex magnetic assemblies, electrical machines and high-end integrated systems. 800-421-6692 11250 Playa Court Culver City CA USA 90230 www.intemag.com 34 Magnetics Business & Technology • Winter 2011 http://www.AsianMetal.com http://www.intemag.com http://www.intemag.com http://www.MagneticsMagazine.com

Table of Contents for the Digital Edition of Magnetics Business & Technology - Winter 2011

Magnetics Business & Technology - Winter 2011
Editor's Choice
Rare Earth Future
Research & Development
Passive Magnetic Bearing Prototype Testing Results
Magnets • Materials • Measurement
Application • Component Developments
MAGNETICS 2012 Conference Preview
2011 Resource Guide
Volatility in the Rare-Earth Material Markets – Some Benefits After All
Marketplace
Spontaneous Thoughts: Is Your Design Optimized?

Magnetics Business & Technology - Winter 2011