Roskill view: An air of cautious excitement surrounded the rare earths industry at this year’s Metal Events 14th International Rare Earths Conference with many delegates expecting further price increases into the New Year as the market continues to tighten for neodymium with strengthening NdFeb magnet demand.
Prices for all elements grew through early to mid-2017 against a backdrop of several market forces including rising magnet demand, plant closures, producer resistance to lower pricing and trader stockpiling. Prices fell back in October with some plants reopening and traders releasing stocks but robust rises in magnet demand continue. Consumption of magnets in electric vehicles is forecast to drive up prices of the magnet materials neodymium and praseodymium in the short-term; this could also encourage some uptick in the price of other rare earth elements.
Much discussion at the conference concerned the opaque nature of Chinese neodymium and magnet material stockpiles, which have the potential to be released in the case of a supply bottleneck (or, alternatively, held in order to bolster prices). In addition, the idea of a theoretical price ceiling, above which, magnet end-users can no longer absorb rising raw material costs, was never far from delegate’s minds. Alister MacDonald, Marketing Director of Alkane Resources suggested an Nd/Pr price sustainability window of US$60-110/kg – below which producers cannot be sustained and above which it becomes uneconomical for consumers. Roskill believes that electric vehicle and wind turbine manufactures could move away from NdFeB magnets in some applications if low availability and high prices of neodymium are sustained.
Delegates heard from existing producers looking to increase production and new project developers hoping to plug the widening gap in neodymium supply. Although a number of developers are hopeful of bringing on new supply of concentrate within the next few years, there still remains a question over the reality of separated production in time to alleviate market fears for Nd/Pr. Supply of concentrate into China seems increasingly inevitable.
Overall, the industry seemed optimistic with hopes that rising prices might encourage new investment in rare earth projects. Several speakers, including closing remarks by Lynas’ Sales and Marketing Director Pol Le Roux, reminded delegates that there would be no return to the extreme rare earth highs of 2011/2012 but, nonetheless, we can perhaps expect a more reserved and realistic return to growth.