Neodymium Prices Explained

Neodymium prices plummeted in sales by 9.1% as the need for magnets in the global plug-in electric car declined. Experts dwell on China’s positive EV sales which will contribute to the commodity’s recovery in the coming years as 90% of EV motors use rare earth magnets.

Why are neodymium prices fluctuating?

1. Supply and Demand

The need for neodymium is propelled by its vital function in producing permanent magnets crucial for a multitude of technologies, particularly the EV and aircraft industries. Changes in demand, especially in expanding sectors such as electric vehicles and renewable energy have a substantial influence on neodymium prices.

2. China’s Dominance in Production

China holds a dominant position as a neodymium producer and alterations in its policies concerning exports and production quotas will ultimately affect neodymium prices.  Additionally, environmental regulations influence its worldwide supply and any shifts in China’s policies can result in market fluctuations.

3. Environment Regulations

Environmental regulations impact the price of neodymium due to the additional costs and investments required to comply with these regulations.

For instance, stricter environmental standards often necessitate more eco-friendly and sustainable production methods, waste management, and pollution control measures. These increased costs are passed on to consumers, affecting the overall market price of neodymium.

Ultimately, these factors influence the market dynamics and price of neodymium.

4. Currency Fluctuation

When there is a fluctuation in exchange rates, the cost of importing or exporting neodymium changes. If the currency in which neodymium is priced strengthens relative to other currencies, it may become more expensive for buyers using weaker currencies, potentially reducing demand and affecting the price.

Conversely, if the currency weakens, it can make neodymium cheaper for buyers using stronger currencies, potentially boosting demand and influencing the price accordingly. Thus, currency fluctuations directly influence the cost and demand for neodymium in international markets, impacting its overall price.

Which variables impact the price of neodymium?

• Supply and Demand
• China’s Dominance in Production
• Currency Fluctuation
• Technology Advancement
• Environment Regulation
• Supply Chain Disturbance

Where does neodymium come from?

Neodymium was discovered in 1885 by the Austrian chemist Carl Auer von Welsbach, who also discovered praseodymium.

It is not found naturally in metallic form or unmixed with other lanthanides, and it is usually refined for general uses. Here’s the extraction process of neodymium:

1. Mining and ore Processing – Neodymium is sourced from mining activities that target ores containing rare earth elements. After mining, the ores undergo crushing, grinding into a fine powder, and chemical processing to extract various rare earth elements, including neodymium.

2. Extraction and Separation – the ore that has been extracted undergoes an intricate chemical and metallurgical procedure to isolate and intensify the rare earth elements, among them neodymium, from the rest of the ore components. Furthermore, the extraction method entails leaching the ore with acids to dissolve the rare earth elements.

3. Purification and Refining – the resulting solution containing neodymium and other rare earth elements is then purified through various chemical and separation methods. Solvent extraction and ion exchange methods are often used to obtain high-purity neodymium.

4. Obtaining Neodymium Oxide – The clarified neodymium solution can undergo additional processing to yield either neodymium oxide or be reduced to create neodymium metal. Neodymium oxide is a prevalent interim product used in the manufacture of neodymium-based magnets and various applications.

5. Alloying and Magnet Production – Neodymium oxide or metal, combined with iron and boron, forms powerful neodymium-iron-boron magnets. These magnets find extensive applications in electric vehicles, wind turbines, consumer electronics, and industrial machinery due to their immense strength.

What are the uses of neodymium?

Neodymium is a versatile element with a wide range of applications in various industries. Additionally, its unique properties make it an essential component in many everyday items and advanced technologies. These are some of the uses of Neodymium:

1. Electric and Hybrid Vehicles – Neodymium magnets are utilized in the motors of electric and hybrid vehicles, enhancing their performance and efficiency. Furthermore, they are used in electric motors, speakers, headphones, and various consumer electronics.

2. Wind Turbines – It is used in the generators of wind turbines to produce efficient, powerful magnetic fields, improving energy generation.

3. Hard Drives and Data Storage – It is used in the magnets of hard disk drives and other data storage devices, enabling high-capacity and compact designs.

4. Laser Technology – Neodymium-doped lasers are used in various applications, including laser pointers, laser surgery, and industrial laser cutting.

5. Audio Equipment – Neodymium magnets are used in high-quality speakers, headphones, and microphones for clear and powerful sound reproduction.

6. Glass and Ceramics – It is used in glass and ceramics to produce vibrant, long-lasting colors in products like glassware and art.

Presently, China is the largest producer of rare earth metals (including neodymium), accounting for 61% of global output. The United States, Myanmar, Australia, and Thailand cover the remaining mine production.

What is the future price of neodymium?

Neodymium is a crucial component for many technologies, however,  its extraction and processing can have environmental and social impacts. Additionally, sustainable and responsible sourcing of neodymium is essential to mitigate these impacts and ensure a sustainable supply of this valuable rare earth element.

Generally, China is a significant player in the neodymium magnet market as the country holds almost 2/3 of the metal’s reserves, and any changes in its exporting policy will make or break its prices. For instance, the country issues export quotas (usually in 2 batches per year) on rare earth metals to counter illegal mining. 

Depending on the market’s demand and supply dynamics, neodymium prices fluctuate according to these levels. Additionally, the surge in wind energy generation will further rally the need for this commodity, spiking its prices.

Thus, experts predicted that its value will reach $56,000 per ton in 2024, a further increase of about $77,500 per ton in 2025, and $82,250 in 2030.